If you want to update your JVM, uninstall the current one and install the latest version. (Actually you don’t have to uninstall the previous version, you can use as many versions as you like side by side if you know how to use just the specific version).
Depending of what you need JDK or just JRE:
JDK 7 Installation for Mac OS X
JRE 7 Installation for Mac OS X
solved Java error: How to update JVM to Java 7 [closed]