Churning The Existing Policy

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Have you been asked by your agent to surrender your existing policy to buy a new better product?? Be cautious

The aim may be to earn an extra first-year commission which is higher than the renewal commission. When your agent asks you to surrender your existing policy, he is asking you to be at loss. When you surrender the policy a lot of charges are deducted. When you buy a new policy the expenses in the first year is close to one premium so you make a loss again and the agent gets a high commission.

  • Ask your agents why you should surrender the policy?
  • Read your current policy Document?
  • Check the insurance cover you have in the existing policy?
  • What is the surrender value you will get?
  • How is your health condition?

Its sometimes beneficial to buy a term plan with low premiums by discontinuing the old one provided you have good health condition as any change in health condition needs to be declared when buying new product.

Make your decision wisely cause it’s about the protection of your family and your money. Don’t allow others to take a decision on your behalf.

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Shailesh Kumar

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