HOW easy is it to resist the appeals of turncoat agents when they come calling and suggest you take out a new insurance policy? Very easy, say independent financial advisers - those who are not agents of any one particular company but who may recommend the products of each or any financial institution - as cashing in one insurance policy for another rarely makes financial sense. Towry Law managing director Miles Standish said: ''Alarm bells would go off immediately because in almost any insurance-related product invariably there are cash penalties, so there has to be a pretty strong reason to consider any sort of termination.'' The industry's own code of practice specifically forbids churning in the clause which states: ''The agent shall not attempt to persuade a prospective policy-holder to cancel any existing policies unless these are clearly unsuited to his needs and he has accurately, completely represented, and compared the policy-holder's existing policy to the prospective policy.'' At National Mutual Asia, general manager for marketing John Snelgrove said the products on offer on the local market were too similar to gain financial advantage by switching out of one company's policy into another. The Hong Kong Federation of Insurers disagreed, pointing to the spread of countries represented in the territory's insurance industry - American, European and Australian - which was reflected in different approaches to product development and styles. The federation advises clients to closely scrutinise the new policy offered: only by offering distinct advantages over the existing contract could a switch be worthwhile, said executive director Tang Yuen-yu. ''This does not mean you should not change the policy, but of course people need to look into their own needs and also to compare the two policies to see if they would suffer any disadvantage [in doing so],'' she said. Considerations to bear in mind when carrying out this process would include the following: Premiums already paid. The way insurance policies are structured means that payments made in the early years are largely eroded by expenses, so the actual surrender value of a young policy will be only a fraction of what you have paid up. These expenses - which go towards set-up costs of the policy as well as the agents' commission fees - can totally wipe out the value in the first two years. This brings two big disadvantages to the holder of a young policy: the money paid out to date is money down the drain, and starting off on a new policy incurs all these charges all over again while at the same time taking even longer to build up a respectable surrender value. Age. Insurance costs more the older you are and the more expensive it becomes to insure your life. Payments set at age 25 when the first policy was taken out will be reset if you switch to a new company and are now aged 35 or 45. Health. The same applies if you take out your original policy in the full bloom of good health and are no longer so strong. New applicants are required to undergo a medical - even if one was already carried out on the first policy - and any illness coming to light stands to push up premiums. Inflation. Most, but not all, policies are inflation-linked, which is especially important in places such as Hong Kong where inflation is high, and, over the life of a policy, can seriously undermine payouts. Terminal bonuses. In the world of insurance, loyalty pays and the big companies usually reward their with-profits policy-holders with a big bonus on maturity, which can be anywhere between 30 per cent and 100 per cent of the policy at that date, according to Mr Standish. Stopping the policy before it has run out means sacrificing some or all of the potential bonus. ''It just does not usually pay to switch contracts on insurance-related products,'' said Mr Standish.