Q. Is it wise to replace an existing policy with a new one?
A. Not always; be cautious about switching policies.  If you already have
a permanent policy in force, dropping it for another permanent policy
may not pay off because the cash value builds up faster as the policy
gets older.   Also, a life insurance policy becomes incontestable after
two years.  That means that, by law, a company must pay a death
claim even if there may have been mistaken information used in

obtaining coverage unless fraud can be proven.  If you are
considering a replacement policy, you want to ask for a written
comparison of the replacement policy with the original.  You should
also seriously consider contacting your present agent or insurer before
you decide to switch.  They may be able to meet or beat the offer of
the replacing insurer with new or updated products that they have
available now.
Q. How do I reinstate a lapsed policy?
A. Reinstatement of a life insurance policy is the process by which a life
insurance company puts back in force a policy which had terminated
because of nonpayment of premiums.  If you are accepted for
reinstatement, you should expect to pay all of the premiums missed,
with interest, and furnish evidence that you are still insurable.  The time
allowed for reinstatement after a policy lapses varies among
companies, but usually it is not less than three years.  One advantage
to reinstating the original policy rather than applying for a new one is
the premium rate for the original policy is based on your age at the
time that the policy was purchased.  The rates for a new policy will be
based on your current age.  In addition, the original policy may contain
provisions which are more appealing.  For instance, the interest rate for
a policy loan on the original policy may be lower than what you could
get under a new policy.  Also, the reinstated policy will only be
contestable as to statements made in the reinstatement application,
providing the original contestable period has expired.

Q. How can I decide whether to buy an annuity?
A. Decide whether your retirement plan will be sufficient to meet your
increased needs in later years.  If you have a good pension plan or a
large savings account, you may not need an additional financial
source for retirement.  As with all plans of insurance, make sure you
really need the annuity and will keep it.  Some companies charge a
penalty, called a surrender charge, if you decide to cancel the
annuity in the early years.
Q. Can my beneficiary still collect Social Security if he or she receives
monthly payments from my life insurance policy?
A. Yes, according to law, monthly life insurance payments will not
disqualify the beneficiary from receiving full Social Security payments.
Q. After reading this guidebook, what if I still do not understand something

in my life insurance policy?
A. Ask questions!  Talk to your agent or company.  Do not feel pressured
or intimidated to sign a policy contract until you are comfortable with
the plan and how it is carried out.