Changing Swiss life insurance policies

I got life insurance around 15 years ago and have been paying premiums since. Recently I have come across another insurance policy which matches my current needs better than the policy I have. Is cancelling my policy and applying for the more suitable one a sensible move?

Hi there,

Moving to a new life insurance policy is rarely a good idea. Surrendering your life insurance policy always costs you. Not only do the premiums you have paid for life insurance coverage up until that point become worthless, but in the case of capital accumulating insurance policies you may also lose part of your accumulated cash value to early termination fees and penalties.

Another factor to consider is that the older you are, the more you can expect to pay in premiums. When you take out a life insurance policy in your younger years, premiums are calculated based on your age throughout the insurance term, with premiums paid in your younger years balancing the cost of premiums paid in your older years. By quitting your life insurance and taking out a new policy, you lose the benefit of the premiums which you alread paid "up front". In most cases, doing this increases the overall cost of being insured.

Take time to carefully calculate the savings or other financial benefits which your prospective new policy offers. Unless these are at least equal to the losses you will incur, switching policies will not normally be financially beneficial.

Best regards from Moneyguru

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