Jumping Life Insurance Providers Hawaii HI
Reader’s Question:
There are lots or life insurance providers here in Hawaii that offers promotions, like low rates for a couple of years, for switching carriers, I’m wondering, is it a good idea to switch providers once their promotional periods are up to save on rates?
Marcus
Koolaupoko, HI
There is definitely no law against switching between life insurance carriers every two years, even if you are only doing so to maximize the low promotional rates being offered, in fact some life insurance brokers there in Hawaii might even encourage you to do so. There is noting wrong about taking advantage of a competitive market however life insurance is not like any other forms of services. Yes, you will save on premiums or rates for the first two years but you have to be careful about any contestability or holding period that a life insurance policy might be enforcing within the initial years of the coverage period.
If anything happens to you within the contestability period, your beneficiaries might get a significantly lower death benefit, or not even get anything at all, since most life insurance contracts would need you to maintain the policy for at least a couple of years before full coverage can be granted. The thing is every time you swap life insurance providers, you go back to zero and in reality you may feel that you are getting smart for taking advantage of low initial rates but in fact you end up paying for something that is not actually giving you the life insurance coverage you thought you have. So in the long run, this kind of practice might not work out to your advantage.
Tags: life insurance carriers, life insurance, cheap life insurance, term life insurance