West Virginia Code of State Rules › Agency 114 - Insurance Commission › Title 114 - LEGISLATIVE RULE INSURANCE COMMISSIONER › Series 114-08 - Replacement Of Life Insurance Policies And Annuity Contracts › Appendix A

Current through Register Vol. XLI, No. 28, July 12, 2024
IMPORTANT NOTICE:
REPLACEMENT OF LIFE INSURANCE OR ANNUITIES
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 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 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 will be replaced or used as a source of financing:
INSURER NAME CONTRACT OR INSURED OR REPLACED (R) OR
POLICY # ANNUITANT 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, a 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 "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?