I upgrade every year and pass the previous phone to my son and trade in the one he's using.
For me the benefits are...
- both phones are under AppleCare
- older phone still has value and significantly offsets the cost of the new phone by ~40%
- improved battery life
- older phone is replaced just as the battery is starting to degrade
- improved camera and low light capabilities
- I always have the best camera for capturing pictures of the family