Life Insurance and Annuities

evaluation may indicate that replacing or changing your policy is advisable. However, certain cautions are appropriate when considering replacing or changing your life insurance. For example: • You may have to pay “start up” costs again. • You may be required to wait one or two years before a new policy passes through the contestable period. During the contestable period the insurer is contractually entitled to cancel the policy or refuse to pay a claim based on omissions, or mistaken or untrue statements in your application. • You may pay a higher premium for new insurance over the duration of the policy because you are older than when you first purchased life insurance. • The financial strength of a new insurer may be different from that of your present insurer. • There may be specific tax consequences when you replace or change your current policy. • You may find different loan provisions in a new policy, or you may find that you cannot take tax advantaged loans in the new policy. • If you use the cash value of one policy to pay for the premium on a new policy, the values used may not be sufficient to support the new policy in future years, and may result in the need to make additional premium payments to keep the insurance in force. • You may not have immediate access to your money in a new policy. You may have to wait a considerable period of time, or pay a monetary penalty, to access the cash value in the policy. 11