If you cancel a life insurance / assurance policy do you get paid out any money .?

Question

Do you receiove any money back if you cancel a life insurance / assurance policy .

Answer 1

You will not get the premiums back when you cancel the life policy. Unless you cancel the policy within the first 10 days, then you will get premiums back. But after that, its not possible.

If you had this life policy for a long time (more than 3 years), and it builds cash value, you may get some of this cash value back. Surrender charges will apply.

Answer 2

Whether you get money from canceling a life insurance policy depends on the policy terms.

Term life insurance has no cash value. You pay a premium for a time period, are covered during that time period, then pay another premium for the next time period. In rare cases, the premium is paid for a long time period and is subject to a partial refund if the policy is canceled after the premium date and before a deadline, after which no refund can be had.

Other forms of life insurance, each having a different name (e.g., whole life insurance), have some investment value. These policies, by law, require the carrier to send you a statement annually about the current value of your insurance policy. Such policies have a "surrender value", an amount the insurance company will pay you in cash upon termination of coverage. If your insurer does not send you (or the premium payer, whoever they are) such a statement, the policy has no investment feature and has no value beyond the death benefit.

It is often possible to borrow the cash value out of a life insurance policy, but, if you do not pay it back, and die while owing it, the policy does not pay the death benefit.

Answer 3

1. If you are talking about a life insurance policy:

a. is it a term policy or a permanent policy? look at the bottom of the first or second page of your policy and it will say. A WHOLE LIFE or UNIVERSAL LIFE or any variation (like MODIFIED or VARIABLE) is a permanent policy. Note: some companies use other terms just to confuse me. You may have to read more of your policy (yuck) or call the company and ask.

b. If it is a term policy the answer is NO. If you paid it for a year and you are in the 2nd month, you will have coverage for the rest of the year. A term policy can be canceled just by not paying the premium when due.

c. If it is a permanent policy, you cannot cancel it by stopping payment - as you can with a term policy. Any cash value in the policy will be used to pay premiums until the cash is $0. Then the policy will terminate - UNLESS you request the cancellation in writing and request the full cash surrender value to be returned to you with none deducted to pay future premiums. As with term, any premiums already paid will cause the policy to run till the next premium is due. If you pay annually, the policy will not cancel until the next annual premium is due. "Cash SURRENDER Value" is not the same as "policy or cash value". Unless it is a mature policy, CSV will be lower than cash value.

2. If you are talking about a property/casualty policy, any unused premium from the cancellation date will be refunded according to the company formula - it is not a linear distribution.

3. Is it a good thing to do? Find yourself a good, honest agent to ask.

Answer 4

Maybe. If you paid in full for the year, and you cancel, most of the time you get part of the year back.

Also, if it was a whole life policy, and you've had it at least 5 years, and it has cash value, and the cash value is GREATER than the cancellation penalty, you get the difference back.

You'll have to call the company and ask, for your specific policy.

Answer 5

Only if the policy has accumulated dividends.