Decreasing Life Assurance question

eastie_2

I got a mortgage 7 years ago and got a Liv. Victoria decreasing Life Assurance for me and my wife for an £87000 morgage over 25 years to be paid off for either of us dying before completion of morgage.
We were both smokers then and 7 years ago we were quoted £23.50 a month .
7 years on my mortgage has reduced to £72000 and my wife and I ,although each 7 years older and have both given up smoking 5 years ago.
I got a quote for the new total of £72000 for us both NON smokers with now only 18 years left on the morgage and Aviva quoted only £12 a month.
Question is can I cancel the original Liv. Victoria decreasing Life Assurance after 7 years and swap to the cheaper Aviva one??

magpiecottage

You can indeed change the policies. Even if your smoker status had not changed, it is likely the premium would be lower. This is because, although you are now older, the policy will not run for as long.

(Put another way, I guarantee you will not die before the end of 2010!).

However, three points:

1) Make sure the cover is like for like - does it provide the same benefits in the same circumstances. In particular, is the level of cover what the existing policy would now pay out? Also, if any critical illness, terminal illness and "waiver of premium" benefit on the old policy is also on the new one.

2) Check to see if the premium is reviewable or fixed. If it is reviewable expect it to go up over time.

3) Do NOT cancel the existing policy until the new one is actually in force (and not merely offered to you) just in case.