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How to cancel your life insurance policy

How to Cancel Your Life Insurance Policy?

by Holistic Leave a Comment | Filed Under: Insurance

Are you worried that you took a life insurance policy blindly?

Did you think it to be a life-saver and now you don’t think so?

[the_ad id=”13526″]
Did your insurance agent mislead you with the wrong facts?

The most common reason for cancelling life insurance is due to mis-selling of the insurance policies.

Insurance agents and relationship managers mislead and make you fall prey for their policies.

Whether you need it or not, they are anyway going to sell it to you, by their false claims.

They do this to get their incentives.

Table of Contents

  • Here are some of the tactics used by them
  • The reasons you want to cancel the insurance policy may be
  • Cancellation during Free-look period
  • How to cancel your policy during the free-look period and get a refund?
  • The process involved in cancelling your policy
  • What is refunded?
  • Why should you cancel the policy after the free-look period?
  • Types of surrender value
  • How to surrender a policy?
  • Conclusion

Here are some of the tactics used by them

  • They promise you to get better returns compared to a fixed deposit.
  • They don’t tell you the benefits of the policy clearly.
  • They incorrectly state what can be claimed.
  • They give misleading information on premiums.

Do not fall for these kinds of marketing strategies used by insurers to get their business going.

They do this to achieve their targets and for commission.

The reasons you want to cancel the insurance policy may be

  • Mis-buying.
  • The reason you bought has changed.
  • You are not able to pay the premium.
  • You no longer need it.

Cancellation during Free-look period

Every life insurance policy has a “grace period” also called the “cool off period,” within which you can cancel the policy.

If you cancel the policy during this period, you are eligible for a refund of all the premiums that you have paid till then, and will not be charged.

How to cancel your policy during the free-look period and get a refund?

They give you 15 days as a free-look period, from the date of receipt of the policy. This is for you to review the terms and conditions.

If you are not happy with the terms, you can simply cancel the policy by stating the reason for cancelling. You will get a refund if you cancel it during this period.

Note:

  • This period is extended to 30 days in case of online sales.
  • You have to prove the date of receipt of the policy.

The process involved in cancelling your policy

  • You have to inform the insurance agent that you wish to cancel the policy.
  • Usually, he tries to convince you and make you retain the policy and not return it. He does this to achieve his targets and not to lose his part of the commission. So be wise and firm in your decision of cancelling the policy.
  • For this, you have to download the cancellation form, from the insurance company’s website or get a copy directly from the insurance office.
  • Cancellation Form

  • After this, you will have to fill in details such as policy details, date of receipt of the policy, agent details and reason for cancelling.
  • After this, the insurance company will go on to cancel your policy.
  • No refunds will be made if you cancel your policy after the free-look period.

What is refunded?

Once the refund application is approved, the refund premium is calculated, after deducting the following:

    1. The pro-rated risk premium for the period in the life insurance policy.

    2. Medical examination expenses incurred by the life insurance company.

    3. Stamp duty charges for the policy document

Why should you cancel the policy after the free-look period?

You can opt for Better Performing Investments:

Life insurance is a weak investment as the cash value component is poor. It offers poor returns and low-risk cover. It can be expensive too.

Hence you may feel it is better to cancel it. There are better performing investments available, like Mutual funds, Public provident fund etc. It is better you invest in these, as it will provide you with better returns.

E.g. If you surrender the plan and invest the same premium in equity, you will earn more despite the premiums paid.

Mistakes are fine, but correcting them is what matters:

It is fine if you made a mistake. But now that you have already found it, you have to rectify it.

How?

If you continue to keep your investments in the same life insurance policy, you will not be getting higher returns. So you will have to cancel the policy and go invest where you have better returns.

How to cancel your policy after the free-look period?

After the free-look period, the policy can be cancelled via surrender.
Surrender is the cancellation of the policy; it can be done at any time.

Cancellation after freelook period

If you surrender before maturity, you can get a portion of the premiums paid, after deducting the charges. This is called the surrender value. It exists only in investment-cum-insurance policies like whole life plan, endowment plan, money back plan and Unit Link Insurance Plan.

If you do a mid-term surrender, you would get a sum of what has been allocated towards savings and earnings on them.

Types of surrender value

Guaranteed surrender value:

You are guaranteed a fixed percent of premiums paid depending on when you surrender. This usually ranges from 30 to 90% of premiums.

If you surrender:

  • After 2/3 years, you will get 30% of premium paid.
  • Between 4-7 years, you will get 50% of premium paid.
  • In the last 2 years, you will get 90% of premium paid.

Special surrender value

This depends on the sum assured, accrued bonus if any, policy terms and total premium paid. It can be calculated as follows:

Special surrender value= (paid up value+ bonus) X surrender value factor.

Paid-up value = Original sum assured X (no. of premiums paid /no. of premiums payable).

Surrender value varies from insurer to insurer. It is better you talk to the agent to know the surrender factor value. You will get a portion of your money only if you have paid consecutive premiums for 2 years (If premium paying term is less than 10 yrs). And 3 years (If premium paying term is more than 10 years).

If you surrender before this you do not get any money.

A surrender charge is imposed for surrendering the contract early or for withdrawing money before the agreed maturity date. This varies from policy to policy. It is usually highest during the first year and may drop as the policy matures.

On surrender, you will get the fund value of the investment minus the charges that the insurer levies on account of premature termination.

If you terminate the cover after 5 years, as per recent IRDAI (Insurance and Regulatory Development Authority) directive, insurance companies can’t levy surrender charges.

How to surrender a policy?

1) Inform the insurance company or agent about your decision to surrender.

2) Request a surrender form (The form is usually available at the branch of the insurer).

3) Fill-up the surrender form

4) Send the form by registered post or you may choose to handover in person. If you are handing over in person, please make sure that you are getting an acknowledgement.

5) Call to confirm if the company received your mail.

6) You will receive your funds in a short time.

Conclusion

As you already know now, life insurance is a weak investment as its cash value component is poor. It offers poor returns, low-risk cover and is also expensive.

There is misselling by Insurance agents, to make business with people who have less or no knowledge of life insurance. Agents earn a commission but the people who took the policy suffer. Do not fall prey for these agents and their business tactics.

It is fine if you already have life insurance, now as you know the procedure for cancelling it, you can go ahead and cancel it, whether it is within the free look period or after the free look period.

If you are not cancelling your poor life insurance investments and not taking a better choice of investing in performing investments, you will not be gaining much return and will be regretting it in the long run.

Hence, it is better you cancel the policy and invest in investments like Mutual funds and Public Provident Fund. You will earn better returns. You will also be glad you took this right decision.

[the_ad id=’13360′]

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Jey S
Jey S
24. September, 2021.
I have been using Holistic Investment Planners for the last three years. Mr. Srinivasavaradhan answered all my questions and doubts very patiently during the first free consultation. I was able to clearly define my short-, medium- and long-term goals once I signed up for the comprehensive plan and got their investment plan suggestion to achieve my goals. They are very polite and highly professional whenever I contact them for any queries or make investments. They never pressurize you to invest on their recommended financial products. I would have been lost money by investing directly without their help since I do not have time and knowledge about different financial products. Risk planning is also done as part of financial planning. Truly, they are holistic planners when it comes to your financial planning. They help you to define your life goals, understand your financial resources and establish a plan to invest towards reaching those goals. They do review your plan as you progress to make sure that you are on correct path to achieve those goals. Kudos to the team and keep up the good work!!! I am happy that I found holistic investment planners for my financial planning and management.
aksaswadkar
aksaswadkar
24. September, 2021.
I was about to retire and really not understanding how to invest money to have financial freedom and fulfilling my goals. Was desperately searching on internet way out and fortunately came across Holistic Investment Planners. I read number of articles on their website and realized that this is the agency which I want and engaged their services for my retirement planning. It is an excellent experience to be associated with Holistic. Right from day one our interaction was fantastic and they gave me such a wonderful plan that I had never imagined. I am fortunate enough to be in the client list of Holistic. I have recommended Holistic to my friends as well.
Lionel Faber
Lionel Faber
16. September, 2021.
I've been availing their services for the past year. They are highly knowledgeable in the field and are very patient with all doubts and queries. Personalized financial planning is provided keeping your short term, medium term and long term goals in mind. They do not pressurize you to purchase schemes of their choice. They provide their input and suggestions and leave the decision up to you which shows their honesty and high principle.
Sridhar
Sridhar
8. September, 2021.
Financial planning brings peace in life. Holistic Investment have supported in arriving financial plan based on future goals. My investments are regular since then. They are professionals in their business, will recommend others.
Nitesh Agrawal
Nitesh Agrawal
6. September, 2021.
I have been using Holistic Investment Planners from last one year. The journey has been fantastic. Being a finance person myself I always thought we can look after and plan own finances also. However, due to lack of time and deciplain the things are not always as desired. After joining with Holistic Investment for the first time Icame to know the Financial goals and quantified them. Some dreams were unrealistic based on the earnings and savings so had a reality check. Also got the information and deciplain of investing on regular and more rewarding securities. I definetly suggest to use Holistic Investment Planners. They are professionals, available and hear youor full story before presenting plans. They are flexile in the sense if there are some urgent deviations required, they help to plan the same. For all professionals/individuals I would suggest using professional help of Holistic Investment Planners for best results in long term investment and financial goals achivements. Last advise will be to start early in your life. It really pays well to start in the beginning itself else the dreams needs to adjust :)
Swetha Vasanth
Swetha Vasanth
6. September, 2021.
This is my first year service with the Holistic Team and I would say that they are very much helpful in creating a financial plan and follow ups during the year. I would definitely suggest them if anyone who is willing to proceed with their savings professionally.
Joseph Mathias
Joseph Mathias
6. September, 2021.
I came to know about Holistic Investment Planners online while searching for different investment ideas. Once I contacted them the journey was very smooth. Mr. Ramalingam explained all the aspects of Financial planning in detail and it opened my mind. I realized how important it is to have a Financial planning. Mr. Rajan suggested all the requirements as per my goals and made a Investment plan keeping in mind of my goals. I started my Investment journey with them. I wish I had done it some years back then it would have been in a different level. Review meetings were held every six month to check the implementation of the plan and check the results as per the requirements and to check if any changes required. Overall it was a good experience with Holistic Investment team and would like to continue in the years to come.
Srinvas Kannan
Srinvas Kannan
30. July, 2021.
I came across Holistic investment planners almost 5-6 years back, but I did not have the trust since I had met a few of them who did not sound promising. Then I started investing through a financial advisor of my friend. After 4 years of investing the returns were very low. I was disappointed and started looking for financial advisors when I came across Holistic investment. I had a detailed discussion about my goals and the way they would approach achieving my goal before deciding to switch my investments to them. After a thorough analysis of my then existing portfolios, they suggested new ones and we zeroed-in on 6 schemes/funds where our investment would be split. I am glad I made the decision of switching over and taking Holistic planner's advise, my returns are handsome and I only wish I could have taken their help/advise 5 years back itself. Neverthless, I would like to recommend their services for investment and financial advise if someone is serious about their investments.
Shivaram Andiappan Selvaraj
Shivaram Andiappan Selvaraj
3. July, 2021.
I got a free first time consultation. I got my doubts resolved. They also gave additional advises for investment planning which was also useful.
Nellai B
Nellai B
26. June, 2021.
I have been associated with them for the past three years. They are very professional and polite in answering all our questions. I have complete trust in their suggestions. I strongly recommend for anyone. I am looking forward to have strong and successful association with them.
Google rating score: 4.4 of 5,
based on 61 reviews

Google Reviews

Jey S
Jey S
24. September, 2021.
I have been using Holistic Investment Planners for the last three years. Mr. Srinivasavaradhan answered all my questions and doubts very patiently during the first free consultation. I was able to clearly define my short-, medium- and long-term goals once I signed up for the comprehensive plan and got their investment plan suggestion to achieve my goals. They are very polite and highly professional whenever I contact them for any queries or make investments. They never pressurize you to invest on their recommended financial products. I would have been lost money by investing directly without their help since I do not have time and knowledge about different financial products. Risk planning is also done as part of financial planning. Truly, they are holistic planners when it comes to your financial planning. They help you to define your life goals, understand your financial resources and establish a plan to invest towards reaching those goals. They do review your plan as you progress to make sure that you are on correct path to achieve those goals. Kudos to the team and keep up the good work!!! I am happy that I found holistic investment planners for my financial planning and management.
aksaswadkar
aksaswadkar
24. September, 2021.
I was about to retire and really not understanding how to invest money to have financial freedom and fulfilling my goals. Was desperately searching on internet way out and fortunately came across Holistic Investment Planners. I read number of articles on their website and realized that this is the agency which I want and engaged their services for my retirement planning. It is an excellent experience to be associated with Holistic. Right from day one our interaction was fantastic and they gave me such a wonderful plan that I had never imagined. I am fortunate enough to be in the client list of Holistic. I have recommended Holistic to my friends as well.
Lionel Faber
Lionel Faber
16. September, 2021.
I've been availing their services for the past year. They are highly knowledgeable in the field and are very patient with all doubts and queries. Personalized financial planning is provided keeping your short term, medium term and long term goals in mind. They do not pressurize you to purchase schemes of their choice. They provide their input and suggestions and leave the decision up to you which shows their honesty and high principle.
Sridhar
Sridhar
8. September, 2021.
Financial planning brings peace in life. Holistic Investment have supported in arriving financial plan based on future goals. My investments are regular since then. They are professionals in their business, will recommend others.
Nitesh Agrawal
Nitesh Agrawal
6. September, 2021.
I have been using Holistic Investment Planners from last one year. The journey has been fantastic. Being a finance person myself I always thought we can look after and plan own finances also. However, due to lack of time and deciplain the things are not always as desired. After joining with Holistic Investment for the first time Icame to know the Financial goals and quantified them. Some dreams were unrealistic based on the earnings and savings so had a reality check. Also got the information and deciplain of investing on regular and more rewarding securities. I definetly suggest to use Holistic Investment Planners. They are professionals, available and hear youor full story before presenting plans. They are flexile in the sense if there are some urgent deviations required, they help to plan the same. For all professionals/individuals I would suggest using professional help of Holistic Investment Planners for best results in long term investment and financial goals achivements. Last advise will be to start early in your life. It really pays well to start in the beginning itself else the dreams needs to adjust :)
Swetha Vasanth
Swetha Vasanth
6. September, 2021.
This is my first year service with the Holistic Team and I would say that they are very much helpful in creating a financial plan and follow ups during the year. I would definitely suggest them if anyone who is willing to proceed with their savings professionally.
Joseph Mathias
Joseph Mathias
6. September, 2021.
I came to know about Holistic Investment Planners online while searching for different investment ideas. Once I contacted them the journey was very smooth. Mr. Ramalingam explained all the aspects of Financial planning in detail and it opened my mind. I realized how important it is to have a Financial planning. Mr. Rajan suggested all the requirements as per my goals and made a Investment plan keeping in mind of my goals. I started my Investment journey with them. I wish I had done it some years back then it would have been in a different level. Review meetings were held every six month to check the implementation of the plan and check the results as per the requirements and to check if any changes required. Overall it was a good experience with Holistic Investment team and would like to continue in the years to come.
Srinvas Kannan
Srinvas Kannan
30. July, 2021.
I came across Holistic investment planners almost 5-6 years back, but I did not have the trust since I had met a few of them who did not sound promising. Then I started investing through a financial advisor of my friend. After 4 years of investing the returns were very low. I was disappointed and started looking for financial advisors when I came across Holistic investment. I had a detailed discussion about my goals and the way they would approach achieving my goal before deciding to switch my investments to them. After a thorough analysis of my then existing portfolios, they suggested new ones and we zeroed-in on 6 schemes/funds where our investment would be split. I am glad I made the decision of switching over and taking Holistic planner's advise, my returns are handsome and I only wish I could have taken their help/advise 5 years back itself. Neverthless, I would like to recommend their services for investment and financial advise if someone is serious about their investments.
Shivaram Andiappan Selvaraj
Shivaram Andiappan Selvaraj
3. July, 2021.
I got a free first time consultation. I got my doubts resolved. They also gave additional advises for investment planning which was also useful.
Nellai B
Nellai B
26. June, 2021.
I have been associated with them for the past three years. They are very professional and polite in answering all our questions. I have complete trust in their suggestions. I strongly recommend for anyone. I am looking forward to have strong and successful association with them.
Google rating score: 4.4 of 5,
based on 61 reviews

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