When and How to Cancel a Life Insurance Policy

If you want to cancel a life insurance policy, the process is generally relatively simple and painless. You could potentially cancel your life insurance policy at any time, but it may not always be in your best interest. You need to make sure that you choose the appropriate time to cancel and then use the proper procedure to do so. Here are a few things to consider about when and how to cancel a life insurance policy. 

When to Cancel

There are a few times that you could potentially think about canceling your life insurance policy. One time that you might want to cancel your policy is if you find a much better deal elsewhere. If you are trying to save money, you could shop around with various life insurance companies and find out how much the premiums are. If you find a better deal, you will need to cancel your existing life insurance policy and then get the new policy.

Another reason that you might consider canceling your policy is if you do not need the benefit anymore. If you gain substantial assets and you have a great deal of cash in savings, you may not need a life insurance policy any more. Life insurance is designed to provide for your loved ones in the event that you pass away. If your children move out of the house and you no longer have a mortgage, you may not need your policy any more.

Getting the Surrender Form

In order to cancel your policy, you will need a surrender form in most cases. With some life insurance companies, you can simply get on their website and print off a copy of a surrender form. With other life insurance companies, you actually have to contact a representative from their customer service department and have them send you a surrender form. They may try to talk you out of of canceling your policy, but if you remain firm, they will eventually send you the form that you need. They can mail it to you, fax it to you, or e-mail it to you in some cases.

Filling out the Form

Once you receive the surrender form, you need to completely fill it out. They will ask for information like your policy number and all of your personal information. You will also need to sign the document. Keep in mind that the actual policyholder has to fill out this document. If you are a family member or friend, the insurance company will not honor your request.

Finishing up

Once you have the surrender form completed, you need to send it back to the company. In most cases, you will need to mail the original form to a particular address for the company. They will want to make sure that they have the actual signature instead of a fax or e-mail. Once they receive your form, they will generally take about 30 days to process the request.