How to Cancel Your Whole Life Insurance Policy
When you feel as if you are no longer in need of your life insurance policy you can cancel it. Be sure to fully evaluate your situation and plan ahead. If you cancel your policy and plan to get life insurance again later, you will probably have an increase in the rates. The older you become the higher your monthly cost for life insurance will be.
Prior to canceling your insurance policy, find out about any tax responsibilities that you may have. You may be eligible for cash back if your premium payments have exceeded the amount you actually owed during the time you have held your policy.
- Initiate the cancellation of your life insurancepolicy by ceasing to pay your monthly or annual premium payment. When your contect lapses your coverage will not be available to you.
- Contact an insurance agent and obtain the address to the company where you should mail in your cancellation letter. Include the date which you plan to cancel out the policy. Inquire about any money that you are due from the insurance company. Additionally, request that you receive a confirmation that your cancellation letter has been received and reviewed.
- Check with your accountant about any IRS obligations that you may have. Death benefits are generally tax-free.
- Send the cancellation letter by certified mail, in order to confirm that your letter has been received and to maintain a paper trail.
- Sign and forward any documents that you receive from the insurance company that states you have agreed to cancellation of your policy.
- Once your cancellation is finalized you will receive the cash value of the policy.