Before dropping any in-force life insurance policy, consider the following:
- If your health status has changed over the years, you may no longer be insurable at standard rates.Your present life insurance policy may have a lower premium rate than is required on a new policy of the same type, if only because you’re older.
- If you replace one cash-value life insurance 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 your original policy.
- You will be subject to a new contestability period which usually lasts for a period of 2 years.
- You should ask insurance agents for a detailed listing of cost breakdowns of both life insurance policies, including premiums, cash-surrender value, and death benefits.
Compare the above mentioned items along with the features offered by both your current life insurance policy and the new policy.
If you decide to surrender or reduce the value of the life insurance policy you now own and replace it with other life insurance, be sure that:
- The agent making the proposal puts it in writing.
- You pass any required medical examination before you discontinue your existing life insurance policy.
- Your new policy is "In Force" before you cancel the old policy.
Here's how you can compare life insurance prices for a new policy.