This can depend on various factors. If you have had your policy only a short time,
replacement probably would not be advised. You may suffer surrender penalties
that would take too long to recoup. It could be very wise to replace older
universal lifepolicies, especially if you plan to keep the policy for quite awhile
longer. Here's a true life example: Mr. X has had a universal life policy for
14 years.He is 48 years old. His death benefit is $100,000.He is paying
$60.00 per month intohis policy, and he has a loan of $2,310. If he continuesthe
policy as it is, based onprojected and guaranteed values, it will lapse in about
13 years. That means it willjust end - no death benefitand no cash value.
His wife is also on the policyfor a $25,000 benefit. If he were to change to an
updated universal life policy,WITHOUT PAYING ANY ADDITIONAL PREMIUM,
he could do the following:
1. Eliminate the loan.
2. Extend his $100,000 death benefit from 13 years to 35 years. (guaranteed)
3. Provide a death benefit of $50,000 for his wife.
4. Have a projected cash value of $13,000 at age 65 instead of 0.