A common reason why people cancel life insurance is that their financial circumstances have changed and they no longer believe they need it. They would prefer to use the money for other instant gratification purposes. When we buy a product or service, we usually pay to use it, but in the case of life insurance, the opposite is true; we don't want to use the product! Insurance, in general, is often referred to as a grudge purchase and this needs to change. But, before a policy is cancelled, policyholders should consider the devastating implications for loved ones. We answer your questions about policy cancellations including how to make cover more affordable and how to reinstate policies.
In order to cancel your life insurance policy, you will need to call your life insurance company. Because life policy cancellations differ from provider to provider, they will be able to provide you with their specific cancellation process. Remember to ask your provider when your cover will end. It is also important to note that you should not be charged any fees or charges for a life cover cancellation.
If cost is the primary reason for life cover cancellation, there are ways to reduce your premiums without losing your insurance coverage. For example you can reduce your sum assured or ask your insurer if there are other ways you can save on your premiums. Perhaps you have stopped smoking or your occupation is no longer considered high risk - these can positively affect your life insurance premium. Make sure you speak to a 1Life consultant to tailor make your cover to suit your pocket.
The answer is no. Life insurance is a risk product, which provides your family financial protection, through the payment of the sum assured, upon your death, as long as you pay your monthly premiums.
Speak to your life insurance provider about reinstating a cancelled life policy, but there are time limits within which you can do so. If you are able, you might have to answer health questions (undergo underwriting) again and your premium might increase and if not, you will need to get a new life insurance policy.
Think twice about cancelling your policy. Rather find a way to make room for life insurance premiums in your budget. Perhaps you can reduce entertainment expenses or holiday savings. Giving your family protection against the loss of your income and the peace of mind knowing that their lives can continue financially uninterrupted, is one of the best gifts that you can give them!
If you miss a policy payment, 1Life will advise you via SMS, email or letter that a debit order has been returned by your bank as soon as we are notified (usually within a few days of a debit order bouncing).
There is a grace period of 31 days if you miss a payment, so you have 31 days from when the premium was due to make up the missed payment. If you don’t catch up and pay your premium, you and your family won’t have cover and claims won’t be paid.
1Life Insurance understands that no South African can afford to be without the financial protection of life insurance. We work with our policyholders to make life insurance not only affordable but also tailored for their life stage. Talk to one of our skilled consultants today.
The views and opinions expressed in this article are those of the authors and do not necessarily represent or reflect the views of 1Life Insurance or its employees.