Connecticut Administrative Code › Title 38a - Insurance Department › 435 - Requirements for the Replacement of Life Insurance and Annuities › Appendix C

Current through July 10, 2024
IMPORTANT NOTICE:
REPLACEMENT OF LIFE INSURANCE OR ANNUITIES
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.
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 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, of 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.
We want you to understand the effects of replacements and ask
				that you answer the following questions and consider the questions on the back
				of this form.
1. Are you considering discontinuing making premium payments,
				surrendering, forfeiting, assigning to the insurer, or otherwise terminating
				your existing policy or contract? ___YES___NO
2. Are you considering using funds from your existing policies
				or contracts to pay premiums due on the new policy or contract?
				___YES___NO
Please list each existing policy or contract you are
				contemplating replacing (include the name of the insurer, the insured, and the
				policy or contract number if available) and whether each policy or contract
				will be replaced or used as a source of financing:
INSURER
NAME
CONTRACT OR
POLICY #
INSURED
OR ANNUITANT
REPLACED (R) OR
FINANCING (F)
1.
2.
3.
Make sure you know the facts. Contact your existing company 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.
I certify that the responses herein are, to the best of my
				knowledge, accurate:
_______________________________________________________________________
Applicant's Signature and Printed Name Date
A replacement may not be in your best interest, or your
				decision 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 to determine whether replacement or financing your
				purchase makes sense:
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, you
				will 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 most 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? (See 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?