How to Cancel Life Insurance
There may come a time when you decide it is necessary to cancel your life insurance policy. Before you do, you need to know exactly how to cancel life insurance because it is not always a simple thing to do. Someone might decide to cancel their policy if they think the coverage is too much for them, or is the wrong type. Or, they may find that they can no longer afford to carry life insurance. Regardless of the reason, there are certain things you must do to reach this objective. Before starting the process, make sure you have your insurance policy documents and recent invoice on hand.
One thing you should know is that you do not want to go to your insurance agent for this. You need to locate the telephone number of the actual insurance company with whom you have your policy. The company should be listed on your bill and may actually be the one doing the invoicing. There should be a toll free number for the insurance company on the invoice, if not, this information can be easily accessed via the Internet.
There are rules and regulations that must be followed in order for you to be able to cancel an insurance policy. For example, your decision to do so must be submitted in writing. There is a surrender form that must be completed. The owner of the policy must submit this form, if the policy owner and the insured individual are different it is important that the owner complete the form or it will not be valid. The owner is the only person who can ask for the form, which can be mailed to him or her. Some insurance companies who allow users to log into their accounts online make forms available for printing. This is not always the case, however.
More often than not, the insurance company will try to change your mind about canceling your life insurance policy. This is because when you do so, they lose money. If you have already done your research regarding this matter and have decided that canceling is right for you, stand your ground. While it is their job to persuade you to keep your policy, be firm yet polite and let them know you are absolutely certain you want to cancel. Just as the owner must fill out and sign the surrender form, the owner must speak to the insurance company.
Another part of learning how to cancel life insurance is figuring out the payout. There is usually a penalty that is taken out of the value, leaving you with less money. This is often known as a surrender charge. Also, companies have at least 30 days from the date they receive your surrender form to process it, so be patient. It is unlikely your cancellation will be rushed along. If your surrender form has any mistakes on it, you will be denied a cancellation and will need to complete another form, so make sure everything is perfect before submission. If you are the owner of a policy that holds no cash value and want to know how to cancel life insurance with the least hassle, simply stop paying your bill. At some point the policy will be canceled due to non-payment.