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Moving Home? Here's Why You Should Review Your Life Insurance and Protection
Moving home usually involves quite a lengthy to-do list.
There's the estate agent, mortgage application, solicitor, surveys, removal arrangements and, eventually, the mountain of cardboard boxes.
With so much happening, it's easy to overlook something important: your existing insurance and financial protection.
If you arranged life insurance when you bought your current property, there's a good chance you haven't given it much thought since.
And that's understandable.
However, moving house is one of the best opportunities to check whether your insurance still reflects your financial circumstances.
Here's why.
Your Mortgage Might Be Getting Bigger
Perhaps you bought your first property five years ago with a £180,000 mortgage.
Since then, you've built up equity, increased your earnings and decided to purchase a larger family home.
Your new mortgage will be £330,000.
That's a significant change in your financial commitments.
But what about the life insurance you arranged alongside your original mortgage?
If it was designed to cover your previous borrowing, it may no longer provide the protection you want.
For example, an existing decreasing term policy might now have a much lower insured amount than your new mortgage balance.
That doesn't automatically mean you should replace the policy or insure every pound of the new mortgage.
It does mean it's sensible to review the position.
Your Family Circumstances May Have Changed
Think about what's happened since you last moved home.
Perhaps you were single when you bought your first property.
Now you're married, have children or share financial responsibilities with a partner.
Alternatively, your children may be older, your household income may have changed or you may have fewer financial dependants.
These changes can significantly affect the type and amount of protection you might want.
For example, a policy originally intended to repay a small mortgage may not provide sufficient financial support for a partner raising young children.
Equally, an existing policy might already provide suitable cover.
The important thing is understanding what you have before making changes.
Your Existing Policy Doesn't Automatically Change With Your Mortgage
A common misunderstanding is that life insurance arranged alongside a mortgage will automatically adjust when you move house.
Generally, it doesn't.
Your mortgage and insurance policy are separate arrangements.
Even if you port your existing mortgage product to a new property, your protection policy will not necessarily change to reflect the new loan.
It's worth checking:
The amount of cover currently in place.
The remaining policy term.
Whether the insured amount decreases or remains level.
Who is insured and who would receive a payout.
Whether your new mortgage term extends beyond your existing policy.
Whether the policy offers options to increase or amend cover.
These details can help establish whether the insurance still meets your objectives.
If you're still weighing up your borrowing options, you can read my guide to Moving Home Mortgages.
Don't Forget About Your Income
Life insurance is important, but it's not the only type of protection worth reviewing.
Moving home often means taking on different monthly expenses.
You may have a larger mortgage repayment, higher household bills, increased council tax or additional childcare costs.
It's worth asking a fairly straightforward question.
If you couldn't work for six months because of illness or injury, how would you pay those bills?
Some people have generous employer sick-pay arrangements.
Others would need to rely on savings or other household income.
For self-employed people, the situation can be particularly challenging because they generally don't have an employer providing sick pay.
Income protection insurance can help replace part of your earnings if illness or injury prevents you from working, subject to the policy conditions.
When moving home, reviewing your income protection alongside your new mortgage commitments can help identify potential gaps.
What About Critical Illness Cover?
Critical illness insurance is another form of protection worth considering.
Unlike income protection, which generally provides regular payments, critical illness cover typically pays a lump sum following diagnosis of a condition covered by the policy, provided the insurer's claim definition is met.
That money could potentially help with mortgage repayments, living costs, adaptations or other expenses.
However, not every illness is covered, and policy definitions differ.
If you already have critical illness insurance, a review can help you understand what you have and whether it remains appropriate.
Should You Cancel Your Existing Life Insurance When Moving?
Not automatically.
This is an important point.
You may have arranged life insurance several years ago when you were younger or had a different medical history.
If you apply for a new policy today, the cost and terms could be different.
You may also have benefits under your existing policy that aren't available on the same terms elsewhere.
In some situations, retaining an existing policy and considering additional cover may be appropriate.
In others, changes to the existing policy or a replacement could be worth exploring.
The right option depends on your circumstances and the policy terms.
Never cancel existing protection before assessing the implications and ensuring suitable replacement cover is in force, where needed.
When Should You Review Your Insurance During a House Move?
Ideally, you should start thinking about protection while arranging your mortgage.
That gives you time to review your current policies, compare your changing needs and consider any potential amendments.
It also means protection doesn't become an afterthought once you've received the keys.
You don't necessarily need to arrange something completely new.
Sometimes a review simply confirms that the insurance you already have remains appropriate.
And that's a useful outcome too.
Do You Have to Use Your Mortgage Lender's Insurance?
Generally, no.
You aren't normally required to purchase life insurance or income protection through your mortgage lender.
You can explore suitable options separately.
The important thing is ensuring any policy meets your needs, rather than choosing it simply because it has been offered alongside the mortgage.
Frequently Asked Questions
Does My Life Insurance Continue When I Move House?
An existing life policy will generally continue according to its terms, provided the required premiums are paid. However, you should notify your insurer of relevant changes and check whether the policy remains suitable.
Do I Need More Life Insurance if My Mortgage Increases?
Possibly. It depends on the level of cover you already have, the new mortgage balance and the financial support you want the policy to provide.
Does Remortgaging Mean I Need New Insurance?
No. Remortgaging doesn't automatically mean you need to replace existing protection.
It's simply a useful opportunity to review it.
Can I Have More Than One Life Insurance Policy?
Yes. It is possible to hold more than one life insurance policy, subject to the insurers' underwriting requirements and any applicable restrictions.
Moving Home in Manchester or Cheshire?
Whether you're upsizing in Altrincham, relocating to Wilmslow, buying a family home in Sale or moving elsewhere in the UK, it's worth considering the protection you have alongside the mortgage you're arranging.
I help clients understand their mortgage options and, where appropriate, discuss how life insurance, critical illness cover and income protection may fit into their wider financial circumstances.
If you're moving house and aren't sure whether your existing insurance is still suitable, feel free to get in touch.
You can also read more about the options available on my Protection Advice page.
Insurance is subject to policy conditions, exclusions and underwriting. This article is intended as general information, not personal financial advice.
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