Can I Cancel my Policy After I Purchase It?

When it comes to life insurance the consumer is king. Throughout the entire process of applying for affordable term life insurance and buying a policy you can cancel your coverage at any time. In certain policies there are complications we will discuss, but if you can deal with those complications you can still walk away and maybe even benefit from joint life insurance.

Cancellation Clauses

When you sign on the dotted line to purchase a life insurance policy you are signing a contract. Like any contract we sign in life a team of attorneys has ensured just about everything is covered in those pages. That would explain why contracts keep getting longer and the print getting smaller on every contract we deal with.

Now, with simple term life coverage there will likely be no issues with cancellation. You cancel the policy, you stop paying the premiums and the coverage ceases. You may be eligible for a refund of some of the premiums or you may not. That is something you need to understand before buying a policy. Your particular policy will have a cancellation clause plainly written. You need to follow the instructions given to ensure you properly cancel the coverage.

Bear in mind that before cancelling you should contact the Customer Service Department at your insurer or call your agent and explain why you are cancelling. There may be some give and take on resolving any issues. The insurance company wants to keep you as a customer. Why not give them the chance to? If you still want to cancel then you can move forward with the procedure. If you have fallen behind on your premium and you are concerned about the policy being cancelled, remember you might have a grace period and even if the policy is already cancelled you may be able to catch up the premiums, pay a small fee, and restore the coverage.

Fees and Penalties

Now, with some policies there are going to be fees and penalties involved with early cancellation. Also, if you are getting a refund of a cash value within a whole life policy and it is more than you paid in premiums over the life of the policy, you will be taxed on that. Be sure you understand the tax implications of any cancellation.

If you understand all the drawbacks, and hoops you must jump through, and that new coverage might cost more if you are older or your health has changed, and you still want to cancel, follow the instructions exactly. If you need to send a certified letter by a certain date, do so. If you follow the directions exactly you should have no issues. If you have any issue with the insurer not holding up their end of the contract regarding cancellation or refunds do not hesitate to contact the insurer by certified letter.

As a term life insurance consumer you really are in charge of your coverage. The life insurance companies make it reasonably simple to walk away should you so choose. If you are having difficulty understanding the language of your life insurance policy contract do not hesitate to contact your agent or the insurer directly for exact instructions. If you are eligible for a refund, ask how much and when to expect it. The most important thing is that you get any money owed to you and you are aware of all the implications of a cancellation. You most certainly can cancel your policy after you purchase it but be sure you are covered with another policy. You should always have this valuable protection in place.

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