10 Life Insurance Answers

• Introduction

1. How Much Insurance To Purchase

2. Term and Whole Life

3. What Type Of Life Insurance To Purchase

4. Accelerated Death Benefits

5. The Truth About Medical Tests

6. Naming Beneficiaries

7. Whether Or Not To Replace Policies

8. Single People And Life Insurance

9. Early Retirement

10. Major Life Change

• Conclusion

Whether Or Not To Replace Policies

It may, or may not, be to your advantage

Be sure to consider:

1. If your health has changed over the years, you may not be insurable
2. Your present policy may have a lower premium
3. You’ll pay acquisition costs on two policies, but end up owning only one
4. The dividend schedule
5. Cash value is generally lower in the early years of a policy
6. Surrender charges decrease over a period of time

The risks of replacing an existing policy

Contestable period

If you've had your current policy more than two years, the company cannot cancel your policy or refuse to pay death benefits because of incomplete or inaccurate information on your application. The 2-year contestable period starts over again if you buy a new policy.

Policy limitations

A policy might not pay for a suicide death until you have had the policy for at least 2 years.

Insurability

If your health has deteriorated since you bought the old policy, you may have become "uninsurable." Your old policy can't be cancelled because of your health problems, but you may not be able to get a new policy.

Surrender charge

You may be subject to a new surrender charge period.

Next » 8. Single People and Life Insurance