There are many reasons that may prompt you to replace a current life insurance policy with a new one. Insurance needs may have changed. Better and more affordable coverage may be offered. Confidence towards a specific agent or insurance company may have increased. The reasons go on from there
Regardless of your situation, the Illinois Department of Insurance notes that before you go through the process of replacing a policy, you should consider whether it is worth doing so or not.
“If you already own a life insurance policy or annuity, you should think twice if someone suggests that you replace it – especially if you have had the policy for a long time,” said the Illinois Department of Insurance.
Before changing life insurance policies or annuities, Illinois consumers should consider the following suggestions made by the department:
-Make sure you still qualify for life insurance, which may have been affected by a recent medical incident.
-As cash values take time to accumulate, determine whether it is worthwhile to replace a current policy or not.
-See that your new insurance policy provides the same benefits listed in your old policy, as policy features are subject to change.
-Understand that you may have already satisfied limits in your old policy – such as a two-year “incontestable” clause – that will be reset with a new policy.
-Before changing companies, talk to your insurance provider as they may offer a better deal to keep you as a customer.
Though you should be careful when switching your life insurance coverage, there could be instances for which changing a policy could be extremely beneficial. For example, buying a new home or having a child may call for additional insurance coverage. Keep in mind that life insurance premiums are currently at an industry all-time low, so contact your adviser if you have any questions regarding your policy.