How To Cancel Life Insurance – Situations may arise that would necessitate your canceling your policy, when you get to that point, here is all that you need to know to on how to cancel life insurance.
Why you May Have to Cancel Life Insurance Policy
Some things are just inevitable and just happen when you don’t want them to, one of which might be a change in income. If there is a significant change in your income (or a loss of one’s job), it may necessitate a cancellation of life insurance policy.
- You can also decide to cancel if your savings have taken a turn for the better.
- You may also decide to cancel if your life insurance policy if the reason you bought your cover has changed.
- But even if your reasons for setting up the policy has changed, note that life insurance still offers your family extra financial security if anything happens to you.
- Another reason might be because you can no longer afford the premiums.
- Note that, when you cancel your life insurance policy, ideally you stop making payments, which means that your beneficiaries do not get benefits.
Other Options to Consider Before Cancelling
Before you cancel, here’s something you should consider;
If you find out that you can no longer pay your premiums as they are, you can talk to your insurer to see if you can agree to a temporary cut in your monthly payments in exchange for a lower amount of cover.
What this means, is that you will be protected to some extent, and when you have enough money to go back to the higher level of cover, your premiums should be no more expensive than before.
How to Cancel life Insurance
Sell out your life insurance policy: This insurance policy is quite easy to cancel. This is because it requires less commitment, thus rather than out rightly cancelling your policy, experts in insurance advise that you sell your life insurance policy which is known as “Life Settlement”.
Here, part of your policy cab is sold, which means that the buyer takes a part of monthly payments in exchange for a fraction of the death benefit.
Stop paying the premiums: The second option, is to stop paying the premiums, to enable the insurer (insurance company) cancel.
Canceling Whole life Insurance Policy
Contact your insurer: Contact your insurer to discuss the odds before cancelling as this type of policy attracts a couple of complications when you resolve to cancel.
Cash-out your policy: Discuss with your insurer and make the company see reasons why should cancel.
No forfeiture: This option applies when you eventually stop making payments. Here, you can decide to take the cash and close the policy to preserve a portion of your benefit. Taking the non-forfeiture option means you would stop making payments while maintaining life insurance coverage.
Will my Money be Returned Back to me When I cancel Life Insurance?
If the life insurance you bought has a cash value, then you will definitely get the money when you cancel.
Before you cancel your life insurance policy, ensure you weigh the highs and lows before you sign out.