Does it make sense to replace a policy?

Think twice before you do, because in many situations it may not be to your advantage. Before dropping any in-force policy, consider:

  1. If your health status has changed over the years, you may no longer be insurable at standard rates.
  2. Your present policy may have a lower premium rate than is required on a new policy of the same type (if, for no other reason, that you have grown older).
  3. If you replace one cash-value policy with another, the cash value of the new policy may be relatively small for several years and may never be as large as that of the original one.
  4. You will be subject to a new contestability period.

You should ask insurance agents for a detailed listing of cost breakdowns of both policies, including premiums, cash surrender value and death benefits. Compare these as well as the features offered by both policies.
If you decide to surrender or reduce the value of the policy you now own and before replacing it with other insurance, be sure that:

  1. The agent making the proposal puts it in writing.
  2. you pass any required medical examination.
  3. your new policy is in force before you cancel the old one.
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