Wisconsin Administrative Code › Office of the Commissioner of Insurance › Chapter Ins 2 - Life Insurance › Section Ins 2.07 - Replacement of life insurance or annuity contracts; disclosure requirements › Appendix I - IMPORTANT NOTICE: REPLACEMENT OF LIFE INSURANCE OR ANNUITIES

Current through June 24, 2024
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 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 insurer
				  or its agent for information about the existing 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 and Date
__________________________________________________________________________________________
Producer's Signature and Printed Name and 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 insurer 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 existing policy?
POLICY VALUES: New policies usually take longer to build cash
				  values and to pay dividends.
Acquisition costs for the existing 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 existing 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 EXISTING 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 existing 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 existing
				  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 existing policy under the federal tax code?
Will the existing insurer be willing to modify the existing
				  policy?
How does the quality and financial stability of the new
				  insurer compare with your existing insurer?