Life Insurance Upgrades

There is a section number 1035 in the IRS tax code that allows for tax free exchanges of life insurance and annuities into newer plans with better benefits.

When it comes to life insurance we've found that many clients have accumulated several cash value life policies. If the client is still somewhat healthy he or she can sometimes combine all of the their old policies into 1 large policy with more coverage and no more premiums. For example, a person with 4 old policies that have a total of $20,000 of cash value and $30,000 of coverage may be able to convert the $20,000 of cash value into $50,000 of coverage in a new plan.

The main reason for being able to get the cash value to work harder is that old policies use old and outdated mortality tables - used to set internal charges for mortality. Some policies still use tables from 1958 when life expectancies were far lower than they are today! The result is the customer is being overcharged and newer policies with the latest tables make the money purchase more coverage.