What Happens If I Cancel My Term Life Insurance?

  1. 63333 POINTS
    Peggy Mace
    Most of the U.S.
    If you cancel your term life insurance policy, your policy simply ends. Since there is no cash value, you will not get any money back, and there are no monetary penalties for cancellation of term life insurance. If you want coverage in the future, you will have to reapply for a new policy.
    Answered on August 12, 2014
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  2. 4249 POINTS
    Gary Lane
    President, Lane Independent Agency, Southern California
    That is the problem with Term Life. If you cancel it you have nothing, no coverage, no policy, and no money, no equity build up. It is the cheapest form of pure life insurance to start, but this is it draw back. That is why folks frequently go with Indexed Universal Life. Talk with your agent about that and whole life. Thank you. GARY LANE.
    Answered on August 12, 2014
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  3. 37376 POINTS
    David G. Pipes, CLU®, RICP®
    Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
    The premium for a term policy is guaranteed for a certain number of years.  If you cancel the policy prior to the end of that term you will have paid slightly more for the coverage than was necessary.  Few term policies have any cash value so there isn’t anything to offset the cost of having carried the policy.  However, if the policy has done its job and is not needed any longer it is not necessary to keep it.
    Answered on August 12, 2014
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  4. 410 POINTS
    Drew Ward
    Owner, LifeInsuranceForBusinesses.com, Atlanta, Georgia
    Term life insurance is referred to as a "unilateral contract". This means that you are paying the insurance company to cover you. If you stop paying, you coverage ends and you are on longer covered. There are some carriers that will offer a refund of your premiums but this is not the norm. If you stop paying your premiums you policy will lapse on its own.
    Answered on August 20, 2014
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  5. 616 POINTS
    Robert J Russell - Finalist for Broker of the Year 2015
    Broker Owner, InsuranceAgentsSelling.com, United States (Most States)
    Term Insurance is like Renting an Apartment. It's typically cheaper than paying house payments as a homeowner and if you move out of the apartment (cancel the insurance) then you get nothing back. It was just a place to live for a Term Period. On the upside - rent can go up every renewal whereas if you buy a 10yr, 20yr or 30 yr term - the rates are level for that term period.
    Answered on August 28, 2016
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