Policy merge is an informal term used to describe administrative or planning strategies that consolidate coverage from multiple life insurance policies into a streamlined structure. While policies themselves are not usually literally merged into a single contract, carriers may allow internal exchanges, face amount adjustments, or combination policies that effectively replace several smaller contracts with one larger policy. Advisors may pursue a policy merge concept to simplify billing, reduce policy fees, improve underwriting classes, or move a client into a more efficient product design. Any consolidation must respect replacement rules, suitability standards, surrender charges, and potential tax consequences, especially if cash value is being surrendered or rolled via a Section 1035 exchange into a new contract.

In practice, a policy merge conversation often begins when a client presents a "shoebox" of old policies with different premiums, carriers, and riders. Advisors and case designers review in-force ledgers and compare alternatives from multiple insurers to see whether consolidating coverage could lower costs or better align with current goals. The result may be one larger permanent policy, a combination of term and permanent coverage, or a laddered structure that replaces several outdated contracts. Agencies carefully document replacement comparisons, disclose any surrender charges, and ensure that new underwriting and contestability periods are understood. While the term policy merge is not a formal legal concept, it has become a helpful shorthand for comprehensive policy rationalization work in many advanced planning practices.