Canceling a policy you currently have before you have a new policy in place.
(Note: Young and healthy = great premium rates.
Older and health problems = higher premium rates or denial of coverage.
Life insurance is a product that needs to be obtained before you need it. In the same way… you are not able to purchase car insurance after a car accident and expect the insurance company to pay for the damage to your car. Same goes for life insurance or just about any type of insurance. When it come to Insurance it is one of those things you need to have before you need it.)
Now knowing how the rates work… Let me share with you – YES Canceling your current policy before you have a new policy in place is a BIG Mistake! I’ve seen this happen over and over again…. and it still makes me cringe when people are too upset or stubborn to learn what your up against when you do this.
Why? Because I know of the many different scenarios that may take place putting you in a terrible position. Doing this in a hast because maybe your upset with the original agent who sold you the policy or the Insurance company itself or you believe you just can’t afford it anymore. Or maybe you have a cash value policy and you want the money from it. (cash value policies are the worst to cancel before they are meant to be cashed in.) What ever the reason, know what will happen and all your options before making this decision that could be a tragic one for your loved ones.
First of all think about the reasons why you have the policy to begin with. Most common reasons:
Financial Stability for loved ones and Pay for Final Expenses, should you pass away unexpectedly which in turn puts a financial strain on loved ones.
Second know when you originally obtained this policy you were younger – therefore the policy premiums are less at your younger age. Assuming the insurance company will be able to offer the same policy… When you try to obtain it at an older age the premiums will undoubtedly be much MORE if you are not denied coverage all together. A denial could happen because of change medical history the underwriters do not like or will not accept.
To sum it up… be absolutely sure canceling your life insurance policy is really the best thing to do for yourself and your loved ones. Talk with your Insurance representative and go over your situation in detail. Before you cancel your old policy make sure you have a new one in place. Which means for a short time you will have two policies active.
Note: This blog is designed for general information purposes only. All information presented on this site should not be interpreted as legal advice and the author assumes no responsibility or liability for the actions taken or not taken by the readers based upon such information. For legal and tax advice contact your attorney or tax adviser.
Rita Sollie, Direct Insurance Representative with North Coast Life Insurance Company (NCL). No gimmicks or schemes here, just genuine and honest service. We don’t sell insurance, we solve problems. I welcome the opportunity to show you what NCL can do for your Life Insurance and Financial needs.
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