Louisiana Administrative Code › Title 37 - INSURANCE › Part XIII - Regulations › Chapter 89 - Regulation 70-Replacement of Life Insurance and Annuities › Subchapter A - General Provisions › Section XIII-8921 - Appendix A-Replacement Notice

Current through Register Vol. 50, No. 6, June 20, 2024
IMPORTANT NOTICE:
REPLACEMENT OF LIFE INSURANCE OR ANNUITIES
(NOTE: This document must be signed by the applicant and
					 the producer, if there is one, and a copy left with the applicant).
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 an 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 interest. 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
					 before you make your purchase decision 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
If you answered "yes" to either of the above questions,
					 list each existing policy or contract you are contemplating replacing (include
					 the name of the insurer, the insured or annuitant, 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.
The existing policy or contract is being replaced
					 because.
I certify that the responses herein are, to the best of my
					 knowledge, accurate:
________________________________ __________
Applicant's Signature and Printed Name Date
________________________________ __________
Producer's Signature and Printed Name Date
I do not want this notice read aloud to me. __________
					 (Applicants must initial only if they do not want the notice read
					 aloud.)
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 "grand-fathered"
					 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?
AUTHORITY NOTE:
					 Promulgated in accordance with
					 R.S.
					 22:3 and
					 R.S.
					 22:644.1.