Life insurance protects you against the uncertainties of life and offers financial protection to your loved ones in your absence. Various insurance companies offer different typed of policies at attractive prices. At times, people want to cancel their insurance policy because they are not happy with it or because they found a better policy for a cheaper price. While one can always cancel their policy, it can be quite time consuming and tricky.
Reason for Cancelling
Before cancelling your life insurance policy, it is important to analyse the reason as to why you are cancelling your policy. Once the policy has been cancelled, you will not be provided cover. Cancelling your life insurance policy to opt for a better policy is one of the valid reasons to cancel your life insurance policy. However, it is important that you compare various insurance policies before opting for one.
Every life insurance policy has a cool off period or grace period that allows the insured to assess their insurance needs and to ensure that the life insurance policy they have is the right one. If an individual cancels their policy within the grace period or cool off period, they will get a refund of all the premiums until then and won’t be charged any additional fee.
How to cancel your life insurance policy?
- The insured has to contact the life insurance provider and convey their wish to cancel the policy.
- Usually, the insurance provider provides alternate options and solutions to the insurer
- If the insurer still wishes to cancel the life insurance policy, they can download the cancellation form from the bank’s website or obtain it from the branch office and fill up the details
- Once the cancellation form is submitted to the bank, the bank will get on to the process of cancelling the policy
- No refunds will be made if the policy is cancelled outside of the cooling off period.
Reasons Not to Cancel the Insurance Policy
Some of the main reasons to not cancel the insurance policy are mentioned below:
- The premium of the policy may increase in case you change the address.
- In case you have changed the job, the premium may be affected in case of a new policy.
- Medical conditions can affect the premium that must be paid.
- As you grow older, the premium that must be paid will increase.
- You will not receive any refund in case you cancel the policy post the grace period.
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