February 13, 2007 09:40 ET

Consumers Should Carefully Consider Decision to Replace Life Insurance Products

IMSA-Qualified Companies Offer Protections That Safeguard Consumers

BETHESDA, MD -- (MARKET WIRE) -- February 13, 2007 -- Before making a decision to replace a life insurance or annuity product, consumers should ask questions and fully consider the long-range result, advises the Insurance Marketplace Standards Association (IMSA).

"Is replacing one financial service product with another always a bad idea? No. There can be very valid reasons for considering the replacement of one product with another," said IMSA President & CEO Brian Atchinson. "However, that recommendation by an agent, bank employee or other sales professional should be made only after careful consideration of a client's long-term financial objectives and insurance needs, and an explanation of the new product features and the impact of exchanging one product for another."

Consumers need to understand what they are buying and whether a particular financial or insurance product meets their financial goals and needs. The consumer will want to compare their existing policy or product with the proposed annuity or life insurance product. He or she may want to ask such questions as:

1. How do the many provisions (benefits, options, cost, and/or limitations)
   of the existing and proposed replacement insurance policy or annuity
2. What advantages, if any, does the new policy or annuity offer?
3. Will the benefits of the new product outweigh the new and possibly
   higher costs?
4. Is there a surrender charge, fee or penalty to get out of my old annuity
   or life insurance policy?
5. Do you understand the annual fees and surrender charges associated with
   the new product?
6. Will there be a new surrender charge period for the new product?
7. Are there tax consequences to replacing one product with another?
One way to help avoid problems with replacement of insurance products is to look for companies that have stringent policies and procedures for replacement sales. This is a key to the qualification criteria for IMSA-certified companies.

"IMSA standards require that companies carefully monitor replacement activity to help avoid issues of inappropriate replacements," said IMSA Chairman Timothy F. Kneeland, President of Life Investors Insurance Company of America, a member of the AEGON Group. "Consumers who buy from IMSA-qualified companies can rest assured they are getting this additional protection when they shop for products to meet their long-term financial goals."

IMSA is the premier standards-setting organization for the life insurance, annuities and long-term care insurance marketplace for individually sold products. Qualified companies commit to maintaining high ethical standards and to being fair, honest, and open in the way they advertise, sell and service their products. The IMSA seal is a guidepost of excellence and integrity for consumers. For more information and a list of IMSA-qualified companies, visit

Contact Information

  • For information, contact:
    Susan Beach