Not satisfied with your life insurance policy? Here’s how to cancel it and get refund
New Delhi: Purchasing a life insurance policy is a commitment. One researches, compares several products before they settle in one and decide to pay a regular premium for the desired coverage. However, sometimes people are not satisfied with the product they bought and the benefits it is offering. In such a situation, one can consider cancelling the policy and buying a new one.
While this may look difficult in the long-life, policyholders can easily cancel their policy during the ‘grace period’ and avail refunds. However, before taking such a step, it is important to analyse the reason for cancellation. Cancelling a life insurance policy to opt for a better policy is one of the valid reasons to cancel it.
The most amicable way to cancel the policy is to write a letter/email to the insurer requesting termination of the policy and then claiming a refund, if applicable. Note that life insurance is a long life contract. However, there are provisions of a free-look period of 15 to 30 days from the date of policy inception during which a policyholder is free to cancel the insurance policy and get a refund.
In order to cancel the policy, the policyholder is required to submit a written cancellation request for the same with policy details, date of receipt of the policy document, the reason for cancellation and agent details. Once the request is received by the representative of the insurance company, they connect with the policyholder to know the reasons for cancellation and try to provide solutions.
However, if the policyholder still wishes to cancel the policy, the company will process the request and issue a refund after deducting charges including medical examination expenses incurred by the insurance company, pro-rated risk premium for the period on cover and stamp duty charges.
It is worth mentioning that once the free look period gets over, one can cancel the policy via surrender. In this case, the insurer may deduct more charges and refund the paid-up or residual premium for a future period as the case may be. Normally, when customers are not satisfied with their policies, they just stop paying the premium and the policy lapse automatically after retention efforts made by the company.