How to Close your Policy

Canceling term insurance is generally much simpler than canceling whole insurance. With either type, you can cancel your life insurance policy at any time, but when you cancel your policy affects whether you’ll be able to get any of your money back. 

Reasons to cancel life insurance

• There are many reasons you might consider canceling your life insurance policy.

• You no longer need it (for example, your kids are out of school and your mortgage is paid off)

• You can no longer afford the premiums

• Buyer’s remorse

• You have a permanent life insurance policy and want to separate your retirement investments from your life insurance

• You want to access the cash value of your life insurance policy

• You have found life insurance coverage at a better price

Canceling a whole life insurance policy is more complicated than just stopping payments. Each policy has slightly different forfeiture rules, but generally, canceling whole life insurance starts with a call to your insurer. But here at InsuredTY We want to provide flexible, customized service. 

If you ever need to cancel your policy, it is free. Just do the following:

1. Feel Free to Call Us

You can call and inform us that you no longer wish to continue. Most life insurers can cancel your policy over the phone, or at least get the process started for you. Please be ready with your policy number handy and we will able to guide you through the steps.

2. Write a letter 

Provide written notice that you’d like to cancel your policy. Some of our policies detail in their contracts that issuing a stop-payment order for your premiums is considered written notice, but you can also write a very simple letter.

Below is an example of a term life insurance policy cancellation letter:

Dear INSURER,

I’m writing to cancel my policy, effective DATE.

My policy number is POLICY NUMBER.

Please return any unused premiums to ADDRESS.

Sincerely, NAME

3. Stop paying premiums 

If you don’t pay your premium within the grace period — the 30-31 days after your premium payment due date during which you can delay your payment without losing your coverage — your insurance is canceled. That’s usually a bad thing, but if you want to cancel your term life insurance policy, it’s that easy: just don’t pay.

Do I get my money back if I cancel my life insurance policy?

You do not get money back after canceling term life insurance unless you cancel during the policy’s free look period, in which case you’ll receive a refund of any premiums you’ve already paid. You may receive some money from your cash value if you cancel a whole life policy, but it will be taxed as income.

Hope this article helps. Thank you and kind regards!