How to cancel life insurance?
Thinking of cancelling your life insurance policy?
How to cancel life insurance
Whatever your reason might be for cancelling your life insurance policy, the immediate consequence is your family no longer has the cover in place. Cancelling your life insurance policy is relatively simple and if within the “free look” period, the premiums paid are refunded.
For many New Zealanders, the COVID-19 pandemic has resulted in financial hardship and people are therefore looking at cutting expenses. Some look at cancelling the life insurance policy, forgetting that they can keep cover in place while the policy is on premium holiday.
Sometimes cancelling might make good financial sense especially if you’ve paid off your mortgage early and no longer need the policy to cover the debt.
If your premiums are increasing, taking out another policy through for instance, an online comparison site because rates are better, without comparing policy features and benefits can mean you are worse off. That’s why getting expert life insurance advice, before cancelling your life insurance policy can mean the difference at claim time.
Reasons to cancel life insurance
There are many reasons you might consider canceling your life insurance policy.
- Premiums have become unaffordable (check out fixed premiums)
- A large inheritance has become available
- You no longer need a life insurance policy
- You’ve found a better deal
Cancelling during the free look period
If you are still within the free look period, you can cancel your policy and get premiums paid refunded. The free look period varies slightly between the companies and is clearly stated within the policy document. By law, there is a 15 day ‘free look’ period for insurance policies whereby the client can cancel and receive all premiums back.
The free look period from the day the policy was issued:
- AIA – 15 days (from when you received the policy documents)
- Asteron – 17 days
- Fidelity Life – 14 days (from when you receive the policy documents)
- Partners Life – 30 days
I don’t want my policy to renew, but I can’t get through to my insurer. What should I do?
Cancelling your life insurance policy is as simple as stopping payments or calling your broker/insurance company to notify them you are cancelling the cover. You can also email the insurance company, stating you want to discontinue the policy. Only the policy owner can cancel the policy, and when you email the insurer, it will help the process if you include
- Policy number
- Policy owners name
I can’t afford to pay the premiums and really want to keep my cover. What should I do?
Many people have been affected lately by the pandemic and are forced to cut costs. The life insurance companies we have partnered with all offer help. Premium holiday or suspension of cover are the main options. If in doubt, give us a call on 0800 25 99 25
How to cancel your life insurance policy
There are two ways to cancel your life insurance policy in New Zealand.
- Cancel your direct debit/credit card authority
The policy will go through its normal lapse process and automatically get cancelled.
Reinstatement a lapsed policy requires certain evidence depending on how long time has passed since the policy lapsed.
- Write a letter (email or snail mail)
Notifying your insurer with a written letter can also be done. The letter must include policy number, policy owners name and signature and date.