If I am replacing coverage does the new company cancel my existing coverage
No, your new insurer won't cancel your old life insurance coverage for you. But you or we can do it. If you decide to cancel your existing policy, hold off until after your new policy is issued and in force. It would be terribly regretable to find yourself vulnerable to an unprotected death because of a delay in your application process or a denial of coverage.
If both your existing and future policies are cash value life insurance, then you should be elligible for a tax-free Section 1035 Exchange. If this is the case, we'll handle all the required paperwork for you. A Section 1035 Exchange allows you to transfer all of the cash value from an existing cash value life insurance policy to a replacement policy, without exposing your gains to income taxes and without treating the cash value transfusion as a premium.
The latter point is of significance because federal regulations place limits on how much may be paid in premiums per year before a life insurance policy loses its tax-advantaged status.
It is wise to review the life insurance market periodically in order to see whether replacing your coverage can save you money. Life insurance rates drop as life expectancies rise, and the market has come out with cheaper products as time passes.
