If you have been paying for your whole life insurance policy for many years now, don’t ever let it go no matter what an agent says.  This is the bottom line of this article and you might as well tattoo that message in your mind.  Understand that that the cash value of your life insurance policy increases and becomes more valuable as you pay into it through the years.

Complaints about misleading sales practices are not new.  A number of class action suits have been filed against life insurance companies for churning or twisting their “vanishing premiums.”

How exactly does this offending practice happen?

There are some deceitful life insurance agents urge their customers to purchase a “new and improved policy’ with their built-up cash. They say that this “new and improved’ policy will have different payment schedule, different features, and more coverage.

While signing up for a new policy, you will go back to square one with your built-up cash value which will then be nothing. Basically, agents want to trick you into buying a “better’ policy so you could lose your build-up of cash. This practice, known as “churning’ or “twisting’, is illegal and unethical, although, it is done.

Jose Montemayor, a Texas insurance commissioner, says, “If you bought the original policy at an earlier age, the new policy might cost more and offer less coverage. In addition, if you should die during the first two years of a new policy, the insurance company can contest claims for the death benefits. Many companies pay larger commissions to agents for new policies than for renewals.’

Life insurance companies make their profit from the money they collect in premiums.  They then invest this money.  Some of those investment earnings are put into the value of your policy.  That’s how it works.  So now that you know better, take better care of your life insurance policy—and guard it with your life from lurking serpents!