sarty
Oysterman,
It's not a bad idea, but here are some reasons why it might not be practical:
- Hassle
- As you would be taking out a new policy each year, you would have to be underwritten each time. Potentially that could involve a new medical (and the hassle associated with that) every year. If you have any medical history, that could get very cumbersome.
- Each year you get a year older, and hence the premium for the new contract will go up each time. This increase gets quite steep at the older ages. Admittely if you're getting such a large discount, this may not matter to you, but it will need to figure in your calculations. In contrast, the premium for an existing contract remains the same each year for the full term.
- Contracts change every year, so different definitions/clauses could be in the new contract which could restrict the cover you have. This is of more importance for critical illness policies than life cover but could apply to life cover (e.g. a new AIDS-type scare). However it means you would need to keep in touch with and research the definitions every year.
- Life Companies could drop LaBrokers from their agency list (and hence prevent LaBrokers from selling their policies) if they found they kept lapsing existing policies and taking out new ones.
- For the above reason, LaBrokers could stop selling to you. Frankly, I'd be surprised if they facilitated this.
- Life Companies could also stop selling to you (I suppose they'd need to find out what you're up to first - but they probably would spot it during underwriting, and the fact you have to state if you have existing policies with them).