Life insurance is about protecting your loved ones, so there is no doubt that you carefully selected your policy. You researched types of policies, completed a needs assessment, and chose the life insurance policy that offer the right protection at the right price. But what happens when your needs change over the years, as they often do for many people? Or, what happens when you hear about a new feature of life insurance, that isn’t included with your plan? Are you stuck with your old, outdated policy?
Luckily, no. You’re not trapped into your current life insurance plan. People often exchange their old policies for a new one, for reasons such as:
- lower premiums – you can get an equal or better policy for less
- your family has grown, or their financial needs have changed, and you require a larger death benefit to protect them
- you want to switch life insurance providers, due to concerns with your current provider such as their solvency, level of customer service, or some other reason
- you want additional benefits or riders not offered by your current policy
- the type of life insurance policy you have no longer suits you; for example, you need to exchange a term life policy for a whole life plan
It’s actually a good idea to perform a new needs analysis every two to three years, because family size, structure, and financial needs can change significantly over time. Your first step should be to call us to schedule an appointment. We can help you decide whether your current policy still suits you. If it does, then great! One simple appointment bought you greater peace of mind.
On the other hand, you might find that your current life insurance plan does not offer the protection your family needs. In that case, you can utilize a 1035 exchange to select a new life insurance policy or a fixed annuity. When performed correctly, you can switch plans or even providers without triggering serious income tax implications.
Since a 1035 exchange is a complicated maneuver, call us for more information. We can help you assess your needs, select a new policy if suitable, and keep your family protected by a life insurance policy that is truly right for you.