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  • What should I consider when replacing life insurance policies?
  • December 12, 2013
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    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; or confidence towards a specific agent or insurance company may have increased.

    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.

  • Category: Articles Library, Life Insurance, Spending

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