Keep it when it still fits and its existing benefits are valuable. Consider changing it only when the improvement is material after surrender charges, taxes, lost benefits, new restrictions, and the new surrender period are counted.
There are two contracts in every replacement
One is the shiny new contract. The other is the contract you already own. A fair comparison puts guaranteed income, cash surrender value, death benefits, riders, fees, and liquidity side by side.
The fact that a new product has a higher headline rate does not settle the question. It may solve a problem you do not have while creating one you do.
Make the recommendation earn its keep
Ask the person recommending the exchange to quantify the improvement and the break-even period. Then ask how that person is paid. Compensation does not make advice wrong, but hiding it makes trust impossible.
Sometimes the correct answer is to keep an imperfect contract because leaving it is worse. That is not exciting. It is still an answer.
- A bonus presented without a break-even calculation
- A fresh surrender period treated like a footnote
- The old income rider is never valued
Do not replace an annuity because someone found a newer annuity. Replace it only because the net result is demonstrably better for your objective.
Check the source
Regulator and government reading behind the plain-English explanation.