Can you cancel life insurance?
There are plenty of reasons you might want to cancel your life insurance policy. In life, things can change unexpectedly. You might decide you can’t afford the cost anymore, that your policy is no longer right for you – or if you’re lucky you might have seen a better deal somewhere else!
Can you cancel life insurance at any time?
Put simply, yes you can. When you think of the term ‘life insurance’, it is easy to imagine a lifelong commitment you can’t get out of. This couldn’t be further from the truth.
Life insurance isn’t set in stone the moment you take it out. You absolutely can review your cover or even cancel it at any point during your policy. Insurers expect this possibility and will have processes in place for when someone decides to cancel a policy.
It is worth bearing in mind that policies will increase in price over time. As we age policies naturally become more expensive, as we become more likely to develop medical conditions. You could even have been diagnosed with an illness since your original policy was put in place.
Can you cancel life insurance and get money back?
It is good to remember that life insurance is a product you have bought, the same as buying an item of clothing in a shop. If you buy a top for example, you get given a receipt and can usually return the item for a refund within a set number of days.
There is a similar process for most life insurance policies. Insurance providers will generally have what is known as a ‘cooling off period’. This will usually be 30 days from when the policy started but this can vary. The cooling off period allows you to cancel your policy within this time and receive a refund of the premium (monthly payment) you have already paid. The same way you would be able to get a refund taking that top back to the shop, as long as you did it within the time allowed.
Can you cancel term life insurance?
Yes, you can cancel a term life insurance policy. It can be simple to cancel a term life insurance policy by stopping your payments and letting the insurer know you want to cancel.
Once you have stopped paying for your policy it gets classed as ‘lapsed’. This means you aren’t covered anymore but you will need to contact the insurer to officially cancel the policy.
Can you cancel a whole life insurance policy?
Even though a ‘whole life’ insurance policy covers you for your whole life (as the name suggests!) you can still cancel it.
Whole life insurance can be more expensive each month than term life insurance, so it is understandable you might decide later you don’t want to pay as much anymore. You should remember though that you are paying a higher price for this cover for a reason.
How to cancel life insurance
So, you want to cancel your policy. Your first thought might be “how do I go about cancelling life insurance?”. There are a few different ways you can cancel a life insurance policy and the way you choose will probably depend on why you want to cancel.
If you don’t want the policy anymore, you might decide to contact your provider directly. This is sometimes the easiest way and you can usually sort this through an email, phone call or letter.
If you want to cancel because you want to swap to a new provider, it could be worth speaking to an independent insurance advisor. They will be able to look at your current policy and compare it with others available on the market.
Should I cancel my life insurance?
Whether you should cancel your life cover really comes down to personal choice. It is a good idea to consider why you want to cancel before making any decisions.
If you want to cancel because you want to cut back on costs, there can be ways to lower the cost of your cover without cancelling it completely. You could:
- Reduce the amount of cover (how many £s you are covered for)
- Reduce the term of your cover (how long you are covered for)
- Make sure the policy you have is still right for you (you might now have less debts or your children may have moved out, meaning you could get away with reducing your cover amount)