Life changes and so might the amount you need covered.
There are multiple reasons why you may want to increase your life insurance cover. Your personal circumstances may have changed (i.e. you get married, have a child, suffer an illness etc), or you may simply decide that the benefit amount is not enough to keep pace with the cost of living. Whatever the reason, if you do decide to increase your cover, there are several ways you can do this:
- Applying to increase your benefit amount. You can also apply to your insurer to have your benefit increased, but you may have to undergo another assessment of your health and circumstances.
- Automatic CPI Indexation. Every year at renewal time, your insurer will offer to increase your cover to keep pace with the Consumer Price Index (usually around 5%). Choosing to accept this offer will at least ensure your benefit amount keeps up with inflation.
- Guaranteed Future Insurability benefit. If your policy includes this benefit, then you will be able to increase your cover under certain conditions, without the need for a medical reassessment.
Compare life insurance from these direct brands
Which brands include a future insurability in their policies?
|Brand||Future Insurability Feature||When will this feature expire (Renewable date following)|
|AIA||Yes||Policyholders 55th birthday|
|AMP Elevate||Yes||Policyholders 55th birthday|
|Asteron||Yes||After policyholders 60th birthday|
|BT||Yes||Policyholders 55th birthday|
|Comminsure||Yes||"The cover expiry date or after the life insureds 45th birthday"|
|MLC||Yes||After policyholders 55th birthday|
|OnePath||Yes||Policyholders 55th birthday|
|TAL Accelerated Protection||Yes||Policyholders 55th birthday|
|Zurich Wealth Protection||Yes||After policyholders 54th birthday|
|Zurich Ezicover||Yes||Not stated|
|TAL Lifetime Protection||Yes||Policyholders 55th birthday|
|American Express||Yes||Policyholders 54th birthday|
Will I be reassessed if I increase my cover?
Underwriting is required with all new policies and the same applies when increasing the cover amount on an existing policy. Your insurer will want to secure themselves against the risk of insuring you as you age and are more likely to experience health issues than when you initially applied for cover, so it will be necessary for you to undergo a medical exam.
Can I avoid reassessment if I increase my life insurance amount?
The only real way to avoid reassessment when applying to increase your cover amount is if your current policy includes a Guaranteed Future Insurability benefit.
Many life insurance policies include this benefit, which allows you to increase your benefit amount without additional underwriting if certain life events cause your circumstances to change. These include:
- A salary increase
- The death of a spouse
Some policies will also allow for an increase of around 25% of the cover amount every two or three years without one of these life events occurring, but while further medical underwriting may not be required, you will still need to provide financial evidence to justify the increase.
Can I increase my cover before a condition is diagnosed?
If you think you may be likely to be diagnosed with a life threatening or terminal illness or disease, it is not illegal to apply for additional cover on your life insurance, providing you do not withhold any information from the insurer. If you do and they increase your cover and you then are diagnosed with the disease, your insurer will be within their rights to refuse you cover if you try to claim.
The best thing to do if you are about to be diagnosed with an illness would be to apply for an increase in cover and inform your insurer of your circumstances. They may allow you to increase your cover for an additional loading or with an exclusion added to your policy in relation to the pre-existing medical condition.