Getting a life insurance policy is a bit like getting married – it's a serious, long-term commitment between you and the love of your life (what do you not describe your insurer in that way?). And when it comes to a whole life insurance, it is literally “until death do you part.
Unfortunately, as we all know, not all marriages last. And even those who do are often unhappy. People get lost. Their eyes wander. They wonder if they would be happier with another partner. You, insurers.
And in these moments you may be wondering: How do I get out of this relationship? Well, we can not recommend a good divorce lawyer, but we can answer your question about how to cancel a whole life insurance and help you ensure that you get the best combination of price, service and extra features (as a driver who benefits)) .
To understand why it is so difficult, why you might want to cancel or replace an entire life insurance policy and what your options are, keep reading.
Why you might want to cancel or replace an entire life insurance policy
Customer satisfaction is a different matter, and this is especially true when you talk about life insurance. Simply put, an entire life insurance policy is a long-term agreement between you and an insurer. You approve a premium payment schedule. In exchange, the insurer agrees to pay the full value of the insurance to your beneficiaries when you die. As an insurance owner, your premium payment is determined by a number of factors, including your age, your overall level of health and the value of the insurance.
Over time, your insurance accumulates in cash ̵
As an insurance owner, there may be many unknowns when you first take out insurance. Your financial needs may change or under a policy, your regular income may change – you may get a promotion or go into a more lucrative line of work. (Congratulations!) Or you can be fired or move on to a new career that is more satisfying, but with lower compensation. You can buy a house or start a family.
Or consider why you have a whole life insurance policy in the first place: to cover your loved ones if you are not nearby. Well, maybe the expenses change. Maybe your child earns a scholarship or decides not to go to a four-year college at all. Maybe you pay off your mortgage early. Perhaps a mysterious rich aunt names you in her will, which takes the form of a treasure map, leading you to a suitcase full of unspecified Tesla options buried under a rock in an abandoned pasture. (It can happen.) Or maybe, more seriously, something happens to one or more of your family, so that you have fewer needs to cover.
The point is that much can happen over the years, even decades, you still have in front of you. Your policy needs can be developed. Terminating an insurance policy may seem like a sensible option.
Why it is so difficult to replace an entire life insurance
In an age of shopping online and getting free shipping and free returns, it can be confusing, even frustrating, to buy something that can not be easily bought up . So we understand – if you want to cancel an entire life insurance policy and are told that you can not, you can become the embodiment of the red-orange emoji with "@ # $% &" over your mouth. So get in touch.
Life insurance started as a community thing. In ancient times, members of a community would raise money to care for families whose main breadwinner died in a war, or fought a fire, or by being kicked by a mule, or otherwise injured or killed in the service. . As societies grew, these organizations were formalized, and some even competed with each other, and the insurance industry slowly emerged.
But the original principle remains – by buying a life insurance you contribute to a larger money, which is managed by the insurer, from which payments are made to those who have lost a loved one. To manage that pool as efficiently as possible, the actuaries began to estimate how long we can all reasonably be expected to live, and the insurance companies began to charge accordingly. In other words, the interest rate you pay today is designed to help the insurer cover insurance well into the future.
What if every policyholder, or even a large minority of policyholders, decided to cancel their insurance policies. Suddenly, that pool would not have that much money in it, which would obviously be a bad thing for those who count on it, now or in the future.
In addition, the insurance industry's regulatory body is concerned about the risks to consumers. You may remember the predatory loans that led to the housing market crash in the 2000s. What if the life insurance industry worked the same way, with insurance companies offering low interest rates just to stop their results, and without thinking about the long-term consequences of their actions. Again, it would not be good for anyone – especially those who expect insurance companies to take care of them for years or decades down the road.
Another thing to keep in mind is that for most people, you are not as healthy as you were when you first bought your insurance. (And for all people, you are not as young as you used to be, unless you have recently made some seriously valuable scientific discoveries.) You may find that a compensation policy becomes more expensive than your current policy. In addition, if you cancel your insurance without having new insurance in place, you risk that something could happen to you under the insurance gap – exactly what life insurance is intended to protect against.
When you buy a life insurance policy that lasts for a decade or more, you expect the insurer to be there for you in the long run. (And rightly so.)
It is only natural that an insurer should expect the same reliability from you. Stability is crucial for the entire life insurance system. This is why insurers and the bodies that regulate them make it harder to cancel or replace an insurance policy than to disconnect the cable or return something to Amazon. Again, this is an important reason to do your homework before buying insurance, not after.
So what are my options for terminating or replacing an entire life insurance policy?
Ok, so now you understand why it is so difficult to cancel an insurance policy. And while you were touched by our brief history of the life insurance industry and our explanations for why canceling a life insurance policy can be detrimental to the public good or potentially cost you some money, you are still unhappy with your life insurance situation. It is fair. Here's what you can do.
If you think you are overinsured …
If you feel you are overinsured, you can always talk to your insurance provider about reducing your coverage and therefore potentially reducing your premiums. You can also pay for a rider you do not want or need. To find out your options, talk to your insurance provider for more information.
If you are still not satisfied, you can investigate what is called a compensation policy. In short (and as the name suggests) you will find and apply for a life insurance policy from a new insurer. If you are approved, that insurer will notify your current insurer and inform them of the details of your new plan. Your current insurer will then have a window under which it can try to keep you updated on your current insurance or restructure it to meet your changing needs. Sometimes this includes some form of incentive – think riders and new payment schedules, not discounts. There is then a wait and more paperwork, and that's all why Haven Life does not currently allow customers to replace their existing policy with one from Haven Life.
So even if the industry is really competitive – that's one reason why Haven Life works so hard to offer the lowest possible prices and to provide such astonishingly accurate quotes – the above provisions also prevent it from becoming too boring. In other words, replacing your policy is not like changing your cable provider or completely cutting the cord. It is a thorough, time-consuming process, which is not easy to go into.
You can also cancel your entire life insurance policy, in which case you will receive what is called the cash return value of your insurance – sometimes less than the actual cash value of your policy. Some of this money can also be taxed. With all of this in mind, you may want to talk to a tax advisor before taking any action.
If you think you are underinsured …
If you are under insured, you may be wondering if you can cancel your current insurance and replace it with a new insurance product that suits your needs. For all of the above reasons, this is not recommended (or in some cases possible). Instead, you can buy additional life insurance. The good news is that you are likely to pay a lower interest rate on your current policy, as you bought it when you were younger and probably healthier. (And again, age and health are huge factors in the premiums you pay for a life insurance policy.) You can keep the lower pricing and the lower premium. To get a new policy, you must apply again. And take out life insurance again … which in turn means you'll probably pay a higher premium for the extra coverage. For some, this will be a small price to pay for the extra peace of mind.
At Haven Life, we have made it easy to purchase additional coverage. Simply apply again with our streamlined online application process. This is all known if you are already a life insurance policy for Haven Life. Please note that if you already have $ 3 million for multiple Haven Term policies, you will not be able to purchase more coverage from us. Other restrictions include whether you started your existing Haven Life life insurance policy within 90 days, or if you have been diagnosed with a fatal illness since purchasing your first insurance policy.
So yes: It's complicated when it comes to this type of insurance product. But given the efforts – financial protection for your loved ones for (hopefully many) remaining years of your life – it's worth doing the right thing.