Canceling a final expense insurance policy is as simple as ceasing your payments on it. However, doing so will likely result in the loss of your death benefit. Let’s take a look at how and if you should cancel your final expense plan.
Why Would You Want to Cancel Your Final Expense Policy?
Whether for financial or life-change reasons, you may decide that you want to cancel your life insurance policy. If you’ve paid off your loans and no longer need the policy to cover them, it may make good financial sense to simply cancel your plan.
However, when it comes to final expense plans, you may want to cancel it for different reasons. Whether it be convenience or changes in your personal life, you probably have a very good reason for wanting to do so. Here are a few of the many reasons you may decide you want to cancel your plan:
- You no longer need it
- You can no longer afford the premiums
- You get a permanent life insurance policy
- You want to separate your retirement investments from your life insurance
- You want to access the cash value of your policy
- You have found life insurance coverage at a better price
The insurance company, when it comes to final expense plans, is likely not able to accommodate your need to cancel—you must, then, be fully certain that you want to cancel your plan before doing so.
What Happens When You Cancel Your Final Expense Plan?
Once purchased, the only way to cancel your final expense plan is to stop paying premiums. However, you will not receive any of your money back. So, if you have been paying premiums on your plan for 5 years, you will lose those 5 years’ worth of payments. You will also, of course, not receive the death benefit once the policyholder passes away after the plan is canceled.
Are There Any Alternatives to Cancelling Your Plan?
If you’ve determined that canceling your plan is your best option but are worried about the repercussions, you may instead choose an alternative solution.
One of these alternatives is to simply lower your coverage amount. Most insurers will let you decrease your coverage amount at least once, which can reduce your premiums. If you’re struggling to afford your plan and want to cancel for that reason, you may choose this route instead.
If these alternatives are not a viable solution, confirm that your loved ones will be protected once your policy is canceled and what the penalties are. Your insurance company should work with you to ensure a smooth cancellation and suggest other alternatives to cancellation.
Worried About Your Final Expense Plan? Senior Life Services Can Help
Don’t let your insurance plan be a burden. Insurance should provide peace of mind and security for the future, not a financial and mental headache and fear. With Senior Life Services, your safety is our priority — whether you need to cancel your current plan or are looking for a plan, we can help. When you’re ready to get started, contact us today.