What must individuals evaluate when replacing a life insurance policy?

When individuals consider replacing a life insurance policy, it is essential to evaluate the coverage and terms of both the existing and the new policy. This involves examining aspects such as the amount of coverage, the types of benefits offered, any exclusions or limitations, and the overall terms and conditions associated with each policy. Evaluating these factors ensures that the new policy meets the individual's current needs better than the existing one and provides sufficient protection for dependents or beneficiaries.

Additionally, understanding the differences in policy features, such as convertibility, renewability, and riders (which may add additional benefits), plays a crucial role in making an informed decision. Without this assessment, individuals may inadvertently choose a policy that does not serve their needs as effectively, potentially resulting in inadequate coverage or unforeseen gaps in protection.