Life Insurance Policy Replacement

Anytime you are replacing an existing life insurance contract with another, make sure to check these four points:

1. Closely compare the two policies in terms of rates, rate guarantees, contestable period, stability of the two companies (if they are different). Make sure your new policy is as good or better than the existing policy.

2. Understand that a new contestable period for fraud (health status or other misrepresentation) starts over (usually for the first two years).

3. Understand that suicide is not covered, usually for the first two years, under a new contract.

4. Do not cancel any coverage until a new policy has been approved, paid for, placed in-force and you are satisfied with the new coverage.

Remember: If it’s not in writing, it doesn’t exist!

Your Life Insurance Policy Is 5+ Years Old

Because insurance rates have declined consistently in recent years, it would be wise to compare your existing policy’s rates with a brand new policy. You could end up paying less even though you are five-plus years older. And it could be an opportunity to lock in another 5-10 years of insurance at a guaranteed rate.

If You Have More than One Life Insurance Policy

Most companies give volume discounts at certain face amounts—usually $100,000, $250,000,  and $1,000,000. If you own more than one policy, it may be worth consolidating them into one policy at a better single rate than the multiple rates you currently pay. At the very least, consolidating policies into one will be more efficient in terms of record keeping and for your beneficiaries in case of death.

Questions? Comments? Suggestions? 1-800-542-5530