14 May 2014 0 Comments

Help! My Life Insurance Premiums are too High!

shutterstock_155461817If premiums for your car insurance are too high, you simply shop the market and if another insurance company beats what you’re paying, you switch.  It’s a pretty easy decision to make.  But, the Life Insurance switch is not so easy.  Aside from the fact that life insurance policies tend to be more complex, it’s also more time consuming and difficult to be approved for the premium that a life insurance agent quotes you.  You can’t decide to cancel your current life insurance policy today and expect to be covered with a new policy tomorrow.  And, a new policy will carry a new 2 year contestable and suicide provision.  But, if you do decide to replace your current life insurance, here are a few tips:

  • Determine your priorities:  maximum current coverage at lowest current premiums…or reduced death benefit with little or no ongoing premium…or anything in-between.
  • Be sure you are comparing apples with apples.  Does the new policy compete on price due to less favorable policy provisions?
  • Be aware that once you have decided on a new policy, it can take about 4-8 weeks before the new policy is approved.
  • Never let your current policy lapse until the new contract is approved, the premium paid and all policy delivery requirements have been satisfied.
  • Answer all questions asked by the medical examiner and agent thoroughly and honestly and read the application you sign to be certain they have been recorded accurately.  This is most important to negate the impact of the new contestable period.
  • Deal with an independent agent who has the ability to provide you with quotes from more than one insurance company.

If the policy being replaced has cash values explore all of the possibilities of how that cash can best be utilized to accomplish your goals.  And…that is a subject onto itself.

Next…options to consider when replacing a life insurance policy that has cash value.

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