HOW TO CANCEL OR DISCONTINUE LIFE INSURANCE POLICY
Must think
carefully before deciding to cancel or discontinue any life insurance policy
REASONS FOR
CANCELATION
You may
decide to cancel your life insurance policy because the purpose you bought your
cover has changed .For example, you wanted the policy to protect your mortgage
repayments, but a windfall gain such as
lottery means you can pay off your home
loan early .Or perhaps you have been able to overpay on your loan due to more
income and fall in interest rates .In
cases such as this, you should bear in mind that even if the original grounds
for setting up the policy have changed, life insurance still gives your family
more financial security if anything
happens to you .More commonly, though, people may decide to cancel their life
insurance because they feel they can no longer pay the premiums.
HOW TO CANCEL A LIFE INSURANCE POLICY
CAN YOU DO
WITH COVER?
In a
difficult economic conditions , households must look at their outgoings and try
to work out where reduction can be made .But the fact that a family is
struggling to pay their life premiums could also be an indication of how important
the cover is .The financial impact of
the death of a parent in such circumstances could be terrible , making life
insurance all the more important .Policies like this can, and perhaps should,
be viewed as a necessity rather than a luxury to be given up when times are
hard .Cancelling cover for a temporary period, with the hope of buying a new
policy at some point in the future, can also be a false economy .Life insurance
is generally cheaper if taken at earlier
age .So if you have had a policy for five years and you decide to cancel it
now, your premiums will probably be much higher if you decide to reinstate the
cover in two years’ time .Added to this, you may suffer health problems which could rise the price of any future policy higher still.
ALTERNATIVES
If you can’t
afford your premiums as they are, talk to your insurer to see if you can agree
to a temporary reduction in your monthly
payments in return for a low amount of cover .This means you will still be protected
to some limit , and when you have enough cash to go back to the higher level of cover, your
premiums should be no more costly than
before .Remember that if you smoke cigratte that have not been advised to your life
insurance company this could void your policy.
CANCEL
PROCEDURE
If you have
just taken out a life policy and want to cancel it for any reason, you
generally have 15 days in which to do so at no extra charge – check the terms
and conditions on your deal .Outside of this initial period, you should simply
write an application telling them you
wish to cancel the policy .You should be
allowed to do so at no charge: you will break giving your premiums, and the cover will no longer apply .You
will generally not be entitled to any refund of premiums you have already paid.
