September 21, 2021
5 Things to Consider Before Replacing Your Existing BetterLife Policy
There are a lot of life insurance companies out there. While there may be good reason for you to change your life insurance policy or annuity coverage, sometimes replacing your existing policy may not be in your best interest.
With such an important decision, we want to make sure that you have all the information you need before you make up your mind. To help, we’ve created a list of five things you need to consider before you replace your current life insurance policy.
What to consider before canceling your coverage:
1. Health and Age
If your health has changed or you are older now than when you bought your existing policy, your premiums will likely be higher on a new policy. You may also be required to take a medical examination to purchase the new policy. Your health could make you ineligible for coverage under the new contract or provide fewer benefits.
2. Cash Value
If your policy builds cash value, it could be years before the cash value in the new policy reaches the cash value level of your current policy. Additionally, terminating your current coverage could cause you to incur a surrender charge.
3. Taxation or Forfeiture
In some cases, the cash value of your existing policy can become subject to taxation or forfeiture if you surrender the policy. There could also be a benefit from favorable “grandfathered” treatment of the current policy under the federal tax code that you may lose by replacing the policy.
4. Contestability Clause
A new policy may contain a contestability clause. This means that the insurance company can reject a death claim during a specified period of time if there was a misrepresentation on the application.
5. Future Value
Sit down with your insurance agent to make a fair comparison of your current policy by using the illustrations of future values provided with the potential new policy. Your current policy may provide valuable rights and benefits that are not included in the new one. Make sure to consider interest rates, the quality and financial stability of each company, and the stability of premium costs.
Wait until you receive your new policy before you cancel your existing contract. Your new policy will have a “free look” period that allows you to think about the new contract and make sure it is the right decision for you.
If you do decide to replace your current policy, make sure you’ve reviewed the new policy thoroughly. There’s a good chance that we can help you modify your current coverage to better fit your needs. Please don’t hesitate to reach out to one of our experienced life insurance agents with any questions. Give us a call at (800) 779-1936, shoot us an email at firstname.lastname@example.org, or fill out our contact form here.