Insurance gives you extra protection if things go wrong. However, you may decide that you no longer want or need your insurance policy. This page explains what you can do if you’ve taken out an insurance policy and decide you want to cancel it.
Cancelling during the cooling-off period
You may want to cancel an insurance policy if you have just bought it and have changed your mind. By law, you have a minimum 14-day cooling-off period during which you can cancel the policy for any reason. If you’ve bought life insurance, the cooling-off period is 30 days.
The cooling-off period starts from when the policy begins or when you receive your policy documents, whichever is later. You should get a refund of any premiums you have already paid. However, your insurer may take off a small amount to cover days when the policy was in force. They may also charge you a small administration fee.
Some insurers may give you a longer cooling-off period. If you’re not sure how long your cooling-off period is, you can check the terms of your insurance policy.
If you want to cancel your policy during the cooling-off period you should contact your insurer as soon as possible
The right to cancel during a cooling-off period does not apply to travel insurance that lasts less than one month.
Cancelling after the cooling-off period
If you want to cancel your policy after the cooling-off period you should check your insurance policy. Most insurers will give you a refund if you have not made any claims during the policy year but you will usually have to pay administration fees.
If you are thinking of cancelling your policy because you’ve found a better deal with another insurer it may be easier and cheaper to wait until your policy is due for renewal and then switch.
Cancelling a direct debit does not cancel your insurance policy. If you do this you will still owe your insurer the premiums. You must contact your insurer to cancel the policy.
Some policies are automatically renewed each year. It’s important to check when your policy is due for renewal so you can make sure that it is not renewed when you don't want it to be.
It’s a good idea to make sure you have a new policy in place before cancelling the old one so that you’re not left uninsured.
Can your insurer cancel your policy?
Occasionally your insurer may wish to cancel your policy. They are only likely to do this if they believe:
something has happened to make it much more likely you will make a claim, or
you have not kept to the terms of the policy.
In most cases your insurer will wait until the policy needs to be renewed then refuse to renew the policy.
Next steps
Check that you are within the cooling-off period.
If your cooling-off period has ended, work out whether it will be better to wait until your policy needs to be renewed, rather than cancel straight away
FAQs
The body should include:
- The date you would like your policy to be canceled.
- A request for a refund of unused premiums.
- A statement that you no longer authorize the insurer to withdraw funds from your payment account for premiums (if applicable)
If at any time: you fail to pay the premium by the due date. you obtained the policy through misrepresentation or fraud. anyone insured on the policy violated the terms or conditions of the policy.
Is there a penalty for Cancelling an insurance policy? ›
Generally, insurers will refund you the money for the unused portion of your policy, assuming you paid in advance. However, depending on your state, and when you cancel, your insurer may charge a cancellation fee.
Do I get money back if I cancel my life insurance? ›
In most cases your premium payments will be forfeited, and you will not receive anything for your previous payments. The one exception to this is if you have whole life insurance and cancel it. You may have built up equity for all of the payments you have made so you may receive a lump sum payment from your insurer.
How do you write a good cancellation policy? ›
Keep your cancellation policy simple and straightforward. Define clear consequences e.g. “If you reschedule the appointment less than 24 hours in advance, you get only 50% refund.” Make sure every customer who books the appointment is aware of your appointment cancellation policy.
Can I cancel my insurance policy at any time? ›
Most providers allow policyholders to cancel their policies at any time. However, some may impose a waiting period before the cancellation goes into effect. This period could be as long as 30 days or more and is intended to prevent insurance gaps for drivers and loss of premiums for insurance companies.
What are the grounds for valid cancellation of a policy? ›
Examples of valid reasons for cancellation include:
Fraudulent claims made by policyholder. Dishonest documentation or deceit by policyholder. Indications that a policyholder is a risk to the insurance company.
What are the three types of cancellation? ›
When filling out the lost policy release, also called a “cancellation/lost policy release,” the insured typically chooses between three types of cancellations: flat, pro-rata, and short rate. Flat cancellations are used when the insurer was never exposed to risk because the coverage never went into effect.
Can you get your insurance back if it is canceled? ›
Some insurance companies will allow you to reinstate your policy if it gets canceled, while others will not. If your existing provider will not reinstate your auto policy, you will have to apply for coverage through another insurer or have your current insurer issue a new policy, if possible.
Can I cancel my insurance policy without penalty? ›
You won't always get a cancellation refund.
If you've paid more toward the policy than is owing for time on risk, you will receive a cancellation refund for the difference. If you've paid less toward the policy than is owing for time on risk, you will owe the insurance company for the difference.
The Bottom Line
An insurance company has the right to cancel your policy if you do not fulfill your obligations under the policy agreement.
How much does it cost to cancel insurance policy? ›
Some insurance companies charge a fee for canceling your plan early. This fee could be a flat rate of $50 or a short rate fee, which is usually 10% of your remaining premium.
What is the best way to cancel a life insurance policy? ›
Start by evaluating your reasons for cancelation and considering how important life insurance coverage is to you. If you decide you don't need life insurance anymore, you can contact your insurance provider and inform them of your decision to terminate the policy. You may need to fill out a cancelation form.
How to cash out an insurance policy? ›
There are several ways you can use the cash value from your life insurance policy while you're still alive, including:
- Borrow from your policy. ...
- Withdraw funds from your policy. ...
- Surrender your policy. ...
- Pay policy premiums using your cash value. ...
- Pro: Receive quick funds. ...
- Pro: Low interest rates on loans.
If you're experiencing financial difficulties or your life insurance policy has fulfilled its primary need to protect you when you need it most, such as protecting your mortgage payments until you pay off your home, you may find that ending your policy is the best course of action.
How do I notify my insurance company of cancellation? ›
Depending on your insurance company's rules, there are a variety of ways to cancel your policy.
- Call your provider. Most major companies simply ask that policyholders speak with an insurance agent to cancel. ...
- Mail or fax your cancellation. ...
- Visit the office. ...
- Have your new insurer deal with it.
Dear [Recipient's Name], I am writing this letter as a formal request to cancel my life insurance policy with your company. My policy number is [Policy no], and please make it effective from [mention date]. I further request that you cease all charges associated with the premium and return the payments made earlier.
How do I cancel my insurance policy? ›
Get in touch with the support department of the insurance company to submit the request for policy cancellation. You will need to send a written request either offline or online with the details of your policy and the reason for the policy cancellation.
What do you say in a cancellation letter? ›
Provide a brief reason for the cancellation.
You should also clarify why you are cancelling the membership or subscription in one brief sentence. You do not need to provide an elaborate reason, only provide context for the cancellation.
