Guide Cancel Life Insurance

1Stop paying on the policy.
An easy way to passively address ending your policy is to quit paying on it. The only problem with that is that some insurance policies are set-up to keep paying on the policy from what you have already put in towards your monthly premium payments, so the policy may continue for a certain amount of time until that additional money runs out. You might instead use the opportunity to cash out on those funds, so consider speaking to your agent to see what your options are.

2Go the honest route. Your insurance agent may disappointed that you want to cancel a policy, but he or she should be professional enough to let you know what your options are, especially if there is a chance that you are simply adjusting what you want to with another policy with the same agency.
Is it possible to cash out the policy?
If you stop paying the premium, how long until your coverage ends?
How long does your coverage extend once you have made your last payment?
If you are canceling the policy due to financial difficulties, does he or she have any alternate suggestions on policies or recommendations for the future once you get back on your feet?
Do you want to cancel the policy so that you can put the money into a different or bigger policy?

3Prepare yourself for paperwork. If you are going to cancel a life policy and replace it with a cash value policy, you have to look at the difference in the two policies. Proper documentation is required to make this switch, and you and your insurance agent are required to fill out and review it to properly cancel any existing policies. This paperwork will be provided by your agent, and he or she can assist you in filling it out.

4Be aware of fees. Depending on the company and the type of policy, there may or may not be an early termination fee on the policy. How the contract is written will determine if there is a standard fee or a percentage to be charged for cancellation. You can review your policy on your own to see if there are fees, but your agent can easily sit down with you to discuss what those fees may be. He or she is more familiar with the set-up of the policy and can quickly find where in the fine print any fees may be.

5Let a broker do it for you. Those who come into large sums of money may consider letting a broker handle the cancellation for them. You may want the broker to sell your policy for a life settlement on the policy where you to receive a lump sum payment on the policy by allowing a third party to purchase all or part of your insurance policy.