How to Cancel a Term Life Insurance Policy
There are many reasons that an insured individual may want or need to cancel a term life insurance policy; perhaps you have too much coverage, maybe you cannot afford your premium, or maybe you just want to switch to a different company. Canceling an insurance policy can be done several ways. Naturally, there is a proper way to cancel a plan by going through the appropriate channels and contacting the insurance company, or by having your insurance agent or broker cancel the policy for you, and finally simply by lapsing in premium.
The Proper way to Cancel an Insurance Plan
Contact the insurance company that holds the life insurance policy to find out what the specific requirements are for canceling a policy. Each company will have their own set of rules that need to be complied with to cancel a plan in an appropriate manner. All insurance companies are going to require a notice in written form, some of the companies will have their own form that will be required and others will request a more informal written, signed and dated letter be submitted.
Important Information to Gather
In addition to finding out the requirements, find out where and how to submit the cancelation request. Many insurance companies will accept written cancelation via fax or email while some may expect a hard copy to be mailed. Be prepared for objections when you call the insurance company to obtain cancelation information because they will likely have many valid challenges to your request to
cancel your life insurance policy in an effort to keep you as a customer.
Have your Life Insurance Agent Cancel
In many situations when an individual is canceling their term life insurance policy it is because they have decided to switch their plan to another company. In the case where a person is replacing an existing term life insurance policy with a new term life insurance policy, the agent or broker can simply submit a form to the existing insurance company; thus taking care of the cancelation on behalf of the insured.
Lapsing can Cause Cancelation
Another way that an insured may find they are without coverage is through lapsing. Lapsing is the same thing as not paying the premium, or monthly bill. Often times when an individual finds they have lapsed on a payment, and the plan is canceled, it is an unexpected and unintentional occurrence. Either way, if an insured does not make the required monthly premium, the insurance company will cancel the term life insurance policy.
Term life insurance policies can be canceled at any time, either by going directly to the insurance company to find out what necessary forms are required and where and how to deliver them; or by making a change and having a life insurance agent assist with the necessary paperwork in order to replace the term life insurance. Canceling a term life insurance plan is not difficult and just requires following a few easy steps to determine the best way to cancel for the insurance company and to meet the needs of the insured.