As your circumstances in life change, so do your life insurance needs. The policy you had in your twenties may not be the best option in your forties, and so on. Plus, the amount and type of coverage you can afford will change according to your income. The best way to stay on top of these changes is to request annual policy statements from your insurance carrier and regularly evaluate how well your policy meets your current needs. Now you can learn how to effectively evaluate your policy and how to cancel your life insurance if it is no longer right for you.
How Do I Know if I Should Make Changes to My Policy?
First, thoroughly read and understand the terms of your policy, and take note of any requirements you will need to meet in order to make future changes. Your life insurance company will most likely mail you an annual policy statement around the anniversary of your enrollment to keep you informed of the status of your policy. If you do not receive one in the mail, contact your carrier to request one.
Next, review your annual policy statements and make sure you are aware of when the policy will expire, so there is no lapse in coverage. Since these annual reports can be difficult to understand, don’t be afraid to ask for help if you need it. A financial advisor can help you determine your current needs and whether they are being met appropriately.
There are some things you can determine on your own. Whether you need to update the beneficiary and whether it is time to convert to a permanent life insurance policy, to name a few. Typically, you would convert to a whole or permanent life insurance when your term life policy is nearing an end, and you can afford the higher premiums. A whole life insurance policy will ensure that you are covered regardless of future health problems or how long you live.
You may also decide to simply change to a different term life insurance policy that provides better payouts or has lower monthly premiums.
How to Cancel Your Life Insurance
It is important to know how to cancel life insurance, but also to be aware of other options. For example, did you know you can often convert your term life insurance policy to a whole life policy rather than start over completely?
A term life insurance policy will cover your dependents in the event of your death up to a certain number of years. However, when you cancel, you get nothing back. To stop your term life benefits, simply contact your insurance company to let them know and stop paying your premiums.
If you can convert your term life insurance into whole life insurance, or sign up for a whole life plan to begin with, you will accumulate cash value over time. If you decide you need to cancel your whole life policy, you may be able to get a return on your investment based on how long you have had the policy and how much you have paid into it. Keep in mind that it typically takes 10 years or more to accumulate enough cash value to counteract cost and fees when canceling.
If your policy is old enough to have cash value and you would benefit more from the cashout than continuing the policy, inform the provider in writing to cancel. You can also ask your provider about reducing the death benefit payout and using the cash value to pay the premiums so you can continue coverage.
Pacific Wealth Solutions
Do you have questions on your existing policies? Or thoughts on exchanging for higher pay-out policies without out of pocket? Pacific Wealth Solutions can help. Request a free quote from Pacific Wealth Solutions to begin the simple, no-medical-exam-required application process.
Term Life Application Steps
Step 1: Apply Now
We will take you to the Coverpath term life page.
Fill out the “Get a Quote” questionnaire and click, “Apply Now.”
Step 2: Create an account.
Manage your policies and investment accounts.
Get help from MassMutual directly, or you can always contact PWS via live chat or email on our website.
Set preferences and notifications. Get helpful financial resources.
Step 3: Submit the application.
Sign in to your account and finish your application.
Submit the application and wait for approval.
Permanent Life Application Steps
Step 1: Apply Now
Navigate to the Permanent Life Insurance page.
Click “Apply Now” and fill out the questionnaire.
After the questionnaire is filled out, we will send you a customized link to continue the process. That’s it!
Start planning for your future and apply for permanent life insurance today!