William Penn Life, 2001 (36. évfolyam, 1-12. szám)
2001-06-01 / 6. szám
Policy shift What to consider when changing your life insurance THAT’S A QUESTION YOU MAY not have asked yourself very often, if ever. But, it’s one you should ask yourself at least once a year. We can’t stress enough the importance of regularly checking the beneficiaries listed on your life insurance policies. It is the only way to ensure that the people you want to receive the benefits of your life insurance are the ones who will receive it. Think about the changes that have occurred in your life since you purchased your life insurance. Getting married, having children, losing a loved one, getting divorced, getting remarried-ali these life changes affect your responsibilities. Do the beneficiaries currently listed on your life insurance policies reflect such changes? If you think you need to update the beneficiaries listed on your policies-either primary or secondary beneficiaries-contact your WPA representative. Or, call our Home Office toll-free at 1-800-848-7366. from the Pennsylvania Insurance Department Life Insurance Buyer's Guide As your life changes, so, too, do your life insurance needs. The policy you bought 10 years ago may no longer be the one that best meets your needs and goals. Before you change policies, however, you should realize that replacements are not always beneficial. You should assess your needs and financial goals. If you determine that your current policy does not fit your needs, then you should carefully compare the benefits and costs of your current insurance policy with other options. Hitting the charts •Before replacing your policy, check to see if your existing policy can be altered to meet your needs. Ask your insurance agent to provide you with a written list of advantages and disadvantages of replacing your policy. In most cases, an agent will show you illustrations (charts) outlining the attractive growth potential of the new policy. Be sure that you understand how many years it will take to reach the earnings potential in the illustration. Remember, since illustrations are often based on non-guaranteed assumptions, such as fluctuating interest rates, you should focus on the guaranteed cash or account values of the new policy and compare them with the values of your current policy. Other considerations.Your old policy may have some provisions and benefits not found in the new insurance policy. Make sure that you are aware of all the benefits of both policies and review the premiums. The cost for the same coverage on the new policy may be higher since the premium is based on your current age and health. The new policy's cash values and dividends may initially be lower because of the costs of issuing a new policy. Your agent also should point out any tax implications. When your life insurance policy is "cashed in" or replaced with another policy, your gain may be subject to taxes. During the first two years of a new policy (the contestable period), a company may contest a claim on a policy because of material misrepresentations. For example, the company could challenge a death claim for possible misstatements in the new policy application. Question your agent about the contestable period. Precautions.if you decide to replace an existing policy, the agent is required to give you, a Notice Regarding Replacement of Life Insurance and Annuities no later than the date the application is taken. This notice is for your protection and you should read it carefully. It will alert you to possible consequences of replacement. The agent or broker must include as part of each application a list of existing life insurance policies and annuities to be replaced. You are best protected when all policies are accurately listed. When you purchase a new policy with funds from existing life insurance, you should sign the appropriate form permitting the company to transfer money from your old policy to the new one. Failure to do so could result in adverse tax consequences to you. [M] Time for a change? If you think it’s time to review your life insurance needs, and make possible changes in your life insurance coverage, contact your local WPA representative. Our knowledgeable and experienced representatives will be glad to help you review your current and future needs and provide anwers to all your insurance questions. 4 llilliain tan Life. June 2001
