Insurance Claim

If you are approached by a life insurance agent and asked to consider canceling your current life insurance policy in order to purchase a replacement policy there are a few things you should know first.

What agents typically do in a change like this is take the cash value of the current life policy and use that to buy more insurance or obtain a new policy. Sometimes the decision to replace an existing life insurance policy may be a good one, but not in every case. Before replacing or changing your life insurance policy, it is best to first assess your needs and decide what will be the best decision for you long term, including what is best for the one's you are protecting.

Before changing your life insurance policy, consider these:

= Extra costs that may be involved to start a new policy

= Depending on your age, you may pay more over the lifetime of a policy because of purchasing a new policy later in life

= Your new insurer may not be as financially strong

= Your new agent may not be as adequately trained or educated

= The tax consequences and/or advantages may be different

= When and how you can take a loan on a new policy may be different

= The cash value you use for your current policy may not be enough to pay the entire new policy in the future, which may result in additional payments

= You may have a policy or loan waiting period

It is  wise to consider converting your current policy to a new policy with your current insurer before switching to a new insurance company. This may help you avoid any extra fees and may be cheaper in the long run. And when choosing to make any changes in life insurance always obtain a second opinion and be aware of the warning signs.