Pennsylvania Code › Title 31 - INSURANCE › Part IV - Life Insurance › Chapter 81 - REPLACEMENT OF LIFE INSURANCE AND ANNUITIES › Appendix A - NOTICE REGARDING REPLACEMENT OF LIFE INSURANCE AND ANNUITIES

Current through Register Vol. 54, No. 28, July 13, 2024
You have indicated that you intend to replace existing life
				  insurance or annuity coverage in connection with the purchase of our life
				  insurance or annuity policy. As a result, we are required to send you this
				  notice. Please read it carefully.
Whether it is to your advantage to replace your existing
				  insurance or annuity coverage, only you can decide. It is in your best
				  interest, however, to have adequate information before a decision to replace
				  your present coverage becomes final so that you may understand the essential
				  features of the proposed policy and your existing insurance or annuity
				  coverage.
You may want to contact your existing life insurance or
				  annuity company or its agent for additional information and advice or discuss
				  your purchase with other advisors. Your existing company will provide this
				  information to you. The information you receive should be of value to you in
				  reaching a final decision.
If either the proposed coverage or the existing coverage you
				  intend to replace is participating, you should be aware that dividends may
				  materially reduce the cost of insurance and are an important factor to
				  consider. Dividends, however, are not guaranteed.
You should recognize that a policy which has been in
				  existence for a period of time may have certain advantages to you over a new
				  policy. If the policy coverages are basically similar, the premiums for a new
				  policy may be higher because rates increase as your age increases. Under your
				  existing policy, the period of time during which the issuing company could
				  (contest the policy because of a material misrepresentation or omission
				  concerning the medical information requested in your application, or)* deny
				  coverage for death caused by suicide, may have expired or may expire earlier
				  than it will under the proposed policy. Your existing policy may have options
				  which are not available under the policy being proposed to you or may not come
				  into effect under the proposed policy until a later time during your life.
				  Also, your proposed policy's cash values and dividends, if any, may grow slower
				  initially because the company will incur the cost of issuing your new policy.
				  On the other hand, the proposed policy may offer advantages which are more
				  important to you.
If you are considering borrowing against your existing policy
				  to pay the premiums on the proposed policy, you should understand that in the
				  event of your death, the amount of any unpaid loan, including unpaid interest,
				  will be deducted from the benefits of your existing policy thereby reducing
				  your total insurance coverage.
After we have issued your policy, you will have 20 days from
				  the date the new policy is received by you to notify us you are cancelling the
				  policy issued on your application and you will receive back all payments you
				  made to us.
*Use bracketed language only when the application asks health
				  questions.
You are urged not to take action to terminate or alter your
				  existing life insurance or annuity coverge until you have been issued the new
				  policy, examined it and have found it acceptable to you.
This appendix cited in 31 Pa. Code §
											81.4 (relating to duties of agents
					 and brokers); and 31 Pa. Code §
											81.7 (relating to duties of
					 insurers with respect to direct response
					 sales).