• This section details what happens when you purchase a new policy to replace an existing policy you were paying premiums on. Click here to return to the main disclosures.
• You are contemplating the purchase of a life insurance policy or annuity contract. In some cases this purchase may involve discontinuing or changing an existing policy or contract. If so, a replacement is occurring. Financed purchases are also considered replacements.

 Policy Replacements & Financed Purchases

A replacement occurs when a new policy or contract is purchased and, in connection with the sale, you discontinue making premium payments on the existing policy or contract, or an existing policy or contract is surrendered, forfeited, assigned to the replacing insurer, or otherwise terminated or used in a financed purchase. 

A financed purchase occurs when the purchase of a new life insurance policy or an annuity contract involves the use of funds obtained by the withdrawal or surrender of or by borrowing some or all of the policy values, including accumulated dividends, or an existing policy to pay all or part of any premium or payment due on the new policy. A financed purchase is a replacement.

You should carefully consider whether a replacement is in your best interests. You will pay acquisition costs and there may be surrender costs deducted from your policy or contract. You may be able to make changes to your existing policy or contract to meet your insurance needs at less cost. A financed purchase will reduce the value of your existing policy and may reduce the amount paid upon the death of the insured.

Understand the Impacts

We want you to understand the effects of replacements before you make your purchase decision and ask that you consider the questions posed in this notice. If you are considering a replacement, make sure you know the facts. Contact your existing life insurance carrier or its agent for information about the old policy or contract. If you request one, an in force illustration, policy summary or available disclosure documents must be sent to you by the existing insurer. Ask for and retain all sales material used by the agent in the sales presentation. Be sure that you are making an informed decision.

A replacement may not be in your best interest, or your decision to replace your current policy could be a good one. You should make a careful comparison of the costs and benefits of your existing policy or contract and the proposed policy or contract. One way to do this is to ask the company or agent that sold you your existing policy or contract to provide you with information concerning your existing policy or contract. This may include an illustration of how your existing policy or contract is working now and how it would perform in the future based on certain assumptions. Illustrations should not, however, be used as a sole basis to compare policies or contracts. You should discuss the following with your agent or your insurance carrier to determine whether replacement or financing your purchase makes sense for you.

Here are some questions and issues for you to consider in order to make an informed decision.

PREMIUMS:  

* Are they affordable?    

* Could they change?    

* You're older - are premiums higher for the proposed new policy?    

* How long will you have to pay premiums on the new policy? On the old policy? 

POLICY VALUES:

* New policies usually take longer to build cash values and to pay dividends.    

* Acquisition costs for the old policy may have been paid, and you may incur costs for the new one.    

* What surrender charges do the policies have?    

* What expense and sales charges will you pay on the new policy?    

* Does the new policy provide more insurance coverage?

INSURABILITY:

* If your health has changed since you bought your old policy, the new one could cost you more, or you could be turned down.    

* You may need a medical exam for a new policy.    

* Claims on many new policies for up to the first two years can be denied based on inaccurate statements.    

* Suicide limitations may begin anew on the new coverage

 IF YOU ARE KEEPING THE OLD POLICY AS WELL AS THE NEW POLICY:    

* How are premiums for both policies being paid?    

* How will the premiums on your existing policy be affected?    

* Will a loan be deducted from death benefits?    

* What values from the old policy are being used to pay premiums? 

IF YOU ARE SURRENDERING AN ANNUITY OR INTEREST SENSITIVE LIFE PRODUCT:    

* Will you pay surrender charges on your old contract?    

* What are the interest rate guarantees for the new contract?    

* Have you compared the contract charges or other policy expenses?

OTHER ISSUES TO CONSIDER FOR ALL TRANSACTIONS:    

* What are the tax consequences of buying the new policy?    

* Is this a tax free exchange? (It may be best to discuss with your tax advisor.)    

* Is there a benefit from favorable "grandfathered" treatment of the old policy under the federal tax code?    

* Will the existing insurer be willing to modify the old policy?    

* How does the quality and financial stability of the new company compare with your existing company?

Notice of Right to Return the Policy/30 Day Right to Examine Policy - Please read your policy upon receipt. 

You may return your policy to the life insurance carrier or to the agent through whom you bought it within 30 days from the date you receive the policy. If you terminate a policy acquired through Ethos within the 30-day period, the policy will be void from the beginning, and Ethos will refund any premiums paid, including any fees or charges. For variable life policies, the refund will be the cash surrender value provided under the policy plus any fees and charges deducted.