Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Sep 15, 2020

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Term life insurance rates tend to be very competitive and have seen declines over the years. If you find that your needs for insurance could be met by a new, lower-cost term life policy, you might consider dropping the older policy and getting a new lower-cost policy.

However, before you do this, you should make sure that the newer policy has the appropriate coverage because a policy with different features might be lower-cost but not have the type of coverage you require.

Also, keep in mind that you are older than when you bought the original policy, and your health status may have changed. This could be an important factor because the new policy will have a new contestable period.

“Contestable period” is insurance jargon for the time period when something in your application, such as the state of your health or your age, might be used to deny a claim. It is typically in effect for a year or two after the time a policy is issued.

When you buy a new term life policy, you will be subject to a new contestable period. Therefore, you should make sure that your new term life policy is issued before discontinuing the old term life policy.

With cash value life insurance it is more difficult to make comparisons. The build-up of cash value and other aspects of the two policies should be compared. Insurance is regulated by “State Insurance Departments.” It is recommended that you contact the Insurance Department for your state in order to obtain a “replacement comparison” chart.

This chart can be then filled-out with help from a representative of the new insurer. When done properly, this chart should give you the data that will enable you to decide if a policy change is in your best interests.