When and how to cancel life insurance?
Life insurance protects the family against loss of income in the event of illness or death of the insured. If you want to cancel your life insurance, here is the procedure and other important information. In most cases, cancelling a policy is not convenient – for example, try reducing your payments or cancelling just the additional insurance.
Life insurance as a guarantee
There are several types of life insurance, some of which include a savings component, and the money from the policy can be paid out even if you reach a certain age or if a certain insured event occurs (injury, hospitalisation, etc.). When choosing the right option and product, you should look at the policy limits, the range of services and the list of exclusions. The reputation of the insurance company and the reviews of its clients also play a role.
How to cancel life insurance
Canceling life insurance should be the last resort to reduce your monthly expenses. Other methods can also be used (more below). However, if you are determined, cancellation of insurance must be done through official channels:
Notify the insurance company in writing that you are canceling your life insurance. You can usually find a sample cancellation request on the insurance company’s website.
A life insurance contract usually has a 3-month notice period (the exact length of the notice period can be found in the terms and conditions).
Be sure to submit your cancellation request on time, otherwise you may be moved to the next policy period that the insurance company will want to pay. The anniversary date can be found in the contract and your request must be received by the insurer at least 6 weeks in advance.
If you decide to take out life insurance again in the future, your current health will be re-examined. Because of your older age, the premiums are also likely to be slightly more expensive, and the insurance company may not cover you under the same terms as last time.
TIP: Non-payment of premiums does not end the contract – it will only happen after the insurance company reminds you again. However, the institution will collect the debt and may add penalties, so it’s always better to go down the official termination route.
Deadlines for cancelling life insurance
You can cancel a newly taken out policy within 2 months (with 8 days’ notice, some places charge a fee for cancellation). For older policies, the 3-month notice period mentioned above is common.
Cancellation of the policy and payment of the money from the reserve life insurance
If you cancel a policy with a savings component after a few years, you can get some of the money back. However, the insurance company will keep some of it as part of the fees (initial fees + up to 2% as surrender charges). You will not get any amount back with traditional risk insurance.
Cancellation of “life insurance” and tax
If you have been using life insurance to reduce your income tax base, you will have to pay back to the tax office the discounts for the last 10 years when the insurance is terminated. If your employer contributed to your policy, you will have to tax it as other income.
Apply for cancellation of the policy as a last resort
If you have fallen on hard financial times and want to reduce your costs, you have options other than cancelling your life insurance policy outright.
Reducing your monthly life insurance payments
After consulting with an insurance representative, you can reduce your premium to a few hundred crowns – but this will also reduce your policy limit. Once you’re financially on your feet, it’s a good idea to increase your payments again to make the most of your policy.
Some insurers offer deferred premium payments for several months. Call yours to find out if it offers this option.
Cancellation of supplementary insurance
You pay extra premiums for individual policies. You can cancel only these sub-policies for specific situations (accident, hospitalisation, etc.) and reduce your total payment.
Another option is to cancel the contract and find an insurance company with better terms – you will save money and give your loved ones protection. Try our life insurance comparison to find a better product for you and your family.