Consumer pricing and coverage concepts

Policy Replacement

Replacement means ending or changing an existing life insurance policy to buy a new one. State rules require disclosure and comparison so the buyer can make a clear choice.

Why it matters

Replacing can cost money, restart the contestability period, and raise premiums at an older age. Sometimes it makes sense, such as for a better rate or needed features. Agents must give notices and list the old policy. Never cancel the old policy until the new one is approved. Ask for a side-by-side comparison first.

Source: naic.org

Where we use this term

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