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What to Do with a Life Insurance Policy You No Longer Want or Need

What to Do with a Life Insurance Policy You No Longer Want or Need

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Having life insurance can be beneficial in many ways. It is something that can help your family members avoid various financial problems when you are no longer here. Still, sometimes you can be stuck with an unsuitable policy and then you realize you no longer need it.

If something like this occurs, it can lead to various issues while you are still alive. Most life insurance agents claim that you are able to cancel your life insurance policy whenever you want to.

Is it a complicated process or not? It highly depends on the amount of time you have had a particular policy, along with the type of policy (whether it is permanent or term) and your age. If you want to learn more about this topic, stay tuned and you’ll figure out everything.

Things to Know About Cancelling Your Life Insurance Policy

Canceling a Term Life Insurance Policy

When it comes to canceling this type of life insurance policy it is relatively easy to get rid of it. You do not need to worry about any fees. All you have to do is simply stop giving money for the premiums and in time, you will terminate your policy.

If you choose to stop giving any money, it is highly likely you will receive some notes in your mail from your insurance company, letting you know that your policy is no longer active if you do not pay for it.

In case you change your mind, then you’ll be provided with the grace period, which is approximately one month to pay for the premium and make sure your policy is still active. Another thing you can do is to contact the insurance company and let them know you are no longer interested in your policy. If you are using a different model, the one that is different from the monthly version, then you’ll want to consider this alternative so that you can get a refund of the premium that you haven’t utilized.

Now, a lot of insurance companies will demand from this request to be made in a written form and they may even ask you to create a letter or simply to fill out a form (that’s actually a surrender form) and that’s it.

Consider a Life Settlement

You should perceive this as an additional alternative for those people who are still not sure what they are supposed to do with a policy they no longer need or want. If you are not familiar with this option, at QLife you can get all the information you need. What’s important to know is that this alternative is definitely very appealing (from a monetary perspective) than many others.

That is one of the reasons why so many life insurance policy owners opt for this option. It is definitely an idea worth considering and if you are not sure whether you are taking the right steps, you can always consult with your trusted advisor.

More About Surrendering Life Insurance Policy

Canceling a Permanent Life Insurance Policy

As we previously mentioned, canceling this type of insurance is a little bit different in comparison to the term life insurance policy. How come? Namely, it can never expire and the premiums are typically higher. Surely, the biggest difference is the investment component. One portion of the cash that you’ve given in premiums goes directly to build up equity in your policy, which you can draw on for as long as you live.

Furthermore, surrendering this type of insurance means that you no longer want to have a life insurance policy. You can do it based on the equity that you have built up. This whole process means that you will receive a check from the insurer but that is going to happen only if you have had the policy for a certain period of time, long enough to build up money value.

How to Do It the Right Way?

If you are one hundred percent sure that you no longer want to have a life insurance policy then it would be smart to find a reliable life insurance settlement company that is going to help you with selling.

Moreover, it also wouldn’t hurt if you consulted with an attorney or financial advisor just to ensure all your best interests are protected during this process. Viz, you can also talk to your accountant because you may encounter some tax embroilments of selling this insurance.

There are a number of reasons why anyone would wish to cancel their life insurance policy. As you can see, you can literally do it whenever you wish to, but just make sure that every step you’re about to take is carefully planned.

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