What are Nevada's rules for replacing existing life insurance?

Nevada has specific regulations governing the replacement of existing life insurance policies—situations where a new policy is purchased and an existing policy is lapsed, surrendered, or otherwise terminated. These rules protect consumers from inappropriate replacement motivated by agent commissions.

When a replacement is involved, your agent must: provide you with a comparison document showing the existing and proposed coverage side by side, including premiums, cash values, death benefits, and any surrender charges or potential tax consequences of replacing. You must sign an acknowledgment that you received and reviewed this comparison.

The insurer must notify your existing carrier of the replacement, giving that carrier an opportunity to address any concerns or provide counter-information. You also receive an extended free look period—typically 30 days—for a replacement policy, versus 10 days for a new policy where no replacement is involved.

Replacement is not always inadvisable—there are legitimate reasons to replace aging or poorly performing policies. However, surrender charges on the old policy, new contestability periods, and loss of conversion rights should all be weighed carefully before replacing.