As valuable as life insurance is, sometimes circumstances change, and you may need to amend or even cancel your plan. Before doing so, we’d recommend chatting to your adviser/broker/insurer first to see if there are any alternatives available to you.

While it’s possible to receive money back if you cancel your cover, there are several factors to consider. We’ll explore the ins and outs of cancelling a life insurance policy, and whether you can expect a refund.

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Reasons for cancelling life insurance

Although life insurance can be an essential tool, people's circumstances can change over time and they may need to cancel their policy. Whether you feel you no longer need cover or you can no longer afford the premiums, there are several reasons you may choose to cancel your policy.

  • Financial difficulties -You may need to cancel your cover to free up money for other bills and expenses. If this is a case, please speak to your insurer before making a decision. They may have a scheme available where you can keep your policy in place.
  • Change in circumstances -Life changes such as marriage, having children, other financial dependents or moving abroad can affect the amount of cover you need. You may need to cancel and replace your existing cover. Again, it’s best to speak to your adviser if this is the case so that they can advise you on the best course of action.
     
  • No longer need cover - As time goes by, you may find that you no longer need protection. In which case, you may want to cancel.
     
  • Inadequate cover - If you have had a policy for some time, you may realise the payout is less than needed. As such, you may want to cancel the policy and take out a more suitable one. We would always suggest securing a new policy before cancelling any existing over, just in case there are any complications in getting the new plan set up.
  • Divorce or separation - If a marriage or relationship breaks down and you have joint life insurance, then it may be necessary to cancel the policy. See -What happens to joint life insurance after divorce?
  • Cheaper options available -If you find a cheaper policy, you may want to cancel and change to another policy. If this is the case, please review both policy’s documents to ensure that you have adequate cover.

If you're thinking of cancelling your policy, please speak to one of our advisers. They’ll be able to talk you through your options and whether you should switch policies.

Please note: The insurance products offered by Cavendish Online have no cash-in value at any time. If you stop paying your premiums your cover will stop, your policy will end, and you will receive no benefit. If you have not claimed before the end of your chosen policy term, the policy will end, and no benefit will be paid.

Need some help deciding? Call us on 01392 436 193

What if I cancel my policy?

Generally, life insurance policies have a cooling-off period when you can cancel for whatever reason. This window usually lasts for around 30 days from the start of the policy so that customers can change their minds if they wish. If this time has passed, most insurers will not permit refunds on premiums already paid.

Therefore, it is necessary to check for cancellation terms and conditions before agreeing to the policy. There could be fees applicable depending on who your insurer is, but the majority will let you cancel at any time for no additional cost. You’ll also need to make sure to cancel your direct debit so you don’t keep paying for cover you don’t want or need.

In short:

  • You'll receive a refund provided you cancel within the 30-day cooling-off period.
  • You won't receive a refund if you cancel after the 30-day cooling-off period.

What if my insurer cancels my policy?

There are several reasons why your insurer may choose to cancel your cover. This can include unpaid premiums or misleading information given when setting up the policy.

In this situation, you should try to contact your insurer and discuss the possibility of reinstating your cover. If your policy was set up by a financial adviser or insurance adviser, you should get in touch with them before cancelling the policy.

Why you shouldn't cancel your policy

It might be tempting to cancel your policy if you feel it's no longer needed. However, it can be beneficial to keep it in place for emergencies or unexpected life events. Here are a few reasons to keep your policy:

Makes a difference in times of need:If you keep your policy, your family could benefit from the payout in case of death. This money can help ease any financial burden that may arise during this difficult time.

It can help your family or loved ones:Policies play a huge role when it comes to taking care of a family and/or loved ones. The money received can be used to pay for funeral expenses, debts, and other financial commitments.

You leave your family at risk:If you cancel your policy and something unexpected happens, you can leave your family and/or loved ones vulnerable. This could be extremely difficult for them to handle.

A new policy may be more expensive: The cost of life insurance tends to rise as you get older. If you cancel your current policy and take out a new one at a later date, it could be more expensive.

If your circumstances change, weigh up the pros and cons before you decide to cancel your policy. This includes checking the terms of cancellation, as well as the cost of taking out a new policy in the future. You may want to consider advice at this point as an adviser can offer an outside perspective as well as plans not available direct to customers.

When considering whether to cancel a policy or not, it’s probably worth talking to an experienced adviser who can get you new quotes first. If they can find you cheaper cover, they can save you money and if they find that you have the best plan in place already, they can put your mind at ease.

Speak to the experts...

Give our advisers a call today.

Our team of friendly and professional advisers are on hand to help with any questions you may have regarding Life Insurance.

The advisers can also make recommendations tailored to your current situation and will research the market on your behalf, ensuring you secure the cover you need and supporting you every step of the way. 


01392 43 61 93(Monday to Friday, 9am - 5.30pm)

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