Some may not see canceling an insurance policy as a wise decision. But there have been plenty of people who have done this for several different reasons. It may be because of financial constraints or financial need. It may be because the policyholder wants a change in plan. But whatever the reason is, canceling an insurance policy should be very easy and stress-free.
Here are some of the things you can do to initiate the cancellation your insurance policy:
1. Inform your insurance agent of your intent to cancel the insurance policy. You can either call your agent or speak to them in person. Your agent may convince you to do otherwise but if your decision is set, having him around to assist you should make the transaction easier, swift and beneficial. Your agent is the one person who can answer any of the following questions you may have about canceling the plan, including questions like:
- Is your policy eligible for cash out? How much will you be getting?
- How long till your coverage ends? Will you get a refund if you have paid the policy in full and in advance?
- Is there an alternative policy one can avail in place of this cancellation?
2. There will be a lot of paperwork involved when you cancel a policy, so be sure that you have everything properly documented. This is another reason for getting in touch with your agent, as he best knows how this paperwork must be filed and completed. Incomplete paperwork may delay the cancellation process and you may not afford this kind of hitch, especially when you need the money from it.
3. Some companies demand a cancellation fee for early termination. Sometimes this also depends on the kind of policy you have initially entered into. Examine the contract you have to be able to determine if there are standard fees involved. Have your agent assist you with this.
4. If you, for whatever reason, cannot be physically there to deal with your agent, you must send him a letter instead. State in your letter the intent to cancel, with the reason why you have arrived at the decision. Also do not forget to indicate the type of policy, the policy number, your name, contact address and signature. You can either fax this letter, for faster movement, or send this via airmail.
5. The fact is, even if you are able to meet with your agent, you must still have the letter handy, for the purpose of documenting these really well, since you are essentially ending a written contract.
6. If you are canceling the insurance because you are switching to another service or another rate, it is important to be aware that there shouldn’t be any gaps in the coverage and this must be avoided. Just in case something happens, then your family is still essentially covered, as your policy cancellation is in transition. Have your agent adjust the effective date and pay the corresponding premium for it.