If your present policy happens to be a high-cost one, it may very well pay you to compare life insurance and switch, despite the cautions. Thus, before you decide either way - to switch to buy life insurance or not to switch - you need to know the cost of your present policy so that you can compare it with the cost of a possible replacement and find the best life insurance coverage for you. Knowing the cost of your present policy may also be useful if you're considering whether to convert a term policy to a cash value one.
Determining the cost of your present policy can be difficult. In none of the fifty states are there regulations requiring that the cost of a policy be disclosed to a policyholder at any time after it has been sold.
Once you compare life insurance and know the twenty-year interest-adjusted net cost index for your existing policy, you are in a position to compare the cost of the policy with that of a possible replacement. Bear in mind that the interest-adjusted net cost index will tell you whether your policy is high or low in cost for its type. You can begin by comparing your policy's cost against the cost of similar policies, before you buy life insurance.
If your policy seems to be low in cost compared with those of similar policies, there's probably little reason to consider a replacement (other things being equal). If your policy appears to be high in cost compared with available alternatives, then switching deserves your serious consideration. We suggest that differences of less than 10 percent in the twenty-year index should be regarded as insignificant for this purpose. Find best life insurance rates online.
Replacing a term policy with a cash value policy will result in an increase in your annual premiums for some years to come. So compare life insurance and make sure the switch to cash value still allows you to give your family adequate insurance protection without unduly straining the family budget. If you can do this, and have a reason for wanting cash value coverage, go ahead but proceed cautiously. A new policy would have to be chosen with great care, since cash value policies vary more widely in cost than term policies do.