Can you cancel life insurance?

Some of the most common reasons for cancelling life insurance include:

• It’s no longer within your budget - While your life insurance premiums are fixed, if you can’t afford to continue paying them, you may feel inclined to cancel your policy or see if more affordable cover is available. It’s important to note that if multiple premium payments are missed your policy could lapse or be automatically cancelled by your provider
• The mortgage has been paid - Term-based life insurance can coincide with your mortgage payments – helping to cover your family home if the worst were to happen to you. You can either cancel your policy once it has fulfilled this requirement, or secure cover which is more suitable for your current circumstances
• It no longer meets your requirements - You may find that your cover is no longer relevant or isn’t required due to a change of circumstances. If you feel your cover is redundant, you may wish to cancel your policy in order to secure a plan which reflects your needs
• You’ve experienced a divorce/ended a civil partnership - If you secured cover to financially support a loved one, and this relationship has ended, you may wish to cancel your policy, or find cover more suited to this lifestyle change. If you have a joint policy, not all providers will let you split the policy in two, this would require you to cancel the existing policy and secure new cover
• You’ve found a better policy - You may have found a policy with a more suitable term, amount of cover, or premium for your current requirements

Some insurers will allow you to make changes to your policy if your circumstances change. This is known as special events clause, or guaranteed insurability option.

The sum assured (pay out amount) and your beneficiaries can be amended on eligible policies. However, many providers won’t let you extend the policy length.

If you don’t have a special events clause, you can secure an alternative policy which coincides with your current life insurance, cancel your current life insurance and replace it, or retain your current policy.

As previously stated, if you cancel your life insurance within 30 days of receiving your paperwork, most companies will refund any premiums you’ve paid in.

If cancelling after this 30 day period, you won’t be eligible for a refund of premiums.

Once you’ve cancelled your policy, no further action is needed, and many companies will send confirmation paperwork.

However, for extra assurance, you may wish to cancel your direct debit to ensure no additional payments are taken from your account.

It’s also important to note that if you pass away and your loved ones make a successful claim, your life insurance policy will be automatically terminated.

No pay out will be made if you cancel a policy.

Because Reassured can help you secure life insurance from many of the UK’s best providers, including AIG, Aviva, Legal & General, LV= and Zurich, the maximum age that life insurance can be secured will vary.

It’s important to remember that:

• Policy length determines how long term-based life insurance lasts
• Your age at the time of application will also impact the maximum length you can secure
• Most providers require cover to cease at a certain age - often around 85 - 90 years old
• Whole of life and over 50s life insurance last until you pass away - providing premiums are up to date
• Premiums for many whole of life insurance policies cease around 90 years old - resulting in continued cover but no additional payments required

Therefore, there’s a set period or point when cover stops, but not always a set age.

To compare a range of life insurance policies, why not contact Reassured?

There’s no universal answer whether cancelling your policy is the right decision, and you should consider your options very carefully.

It’s important to talk to a life insurance broker, like Reassured, to help you make an informed decision, and discuss your available options.