Life Insurance Basics
What is a life insurance replacement?
A life insurance replacement occurs when a new life insurance policy is purchased and an existing policy is lapsed, surrendered, or converted in connection with the new purchase. Replacements are regulated to protect consumers from unsuitable replacements. Your agent must provide a replacement notice if a replacement is involved.
Key Points
- Replacement: new policy purchased and existing policy lapsed or surrendered
- Regulated to protect consumers from unsuitable replacements
- Agent must provide a replacement notice
- Consider: new contestability period, new suicide exclusion, surrender charges
- An independent agent can help you evaluate whether a replacement is in your best interest