Life Insurance is designed to provide your family with financial aid in the event of your death, including paying off outstanding debts whilst helping them to maintain their standard of living.
Yet despite the value of such protection, there are times when you may need to review or cancel your Life Insurance policy.
Sometimes, the biggest factor driving the cost of cancelling Life Insurance is the expense. Although Life Insurance typically costs just a few pounds a month, we understand that sometimes even such a small outlay can be too high if you’re strapped for cash.
The reality is, however, that saving money by cancelling your policy today could mean financial loss in the future.
This could either be because you sadly pass away without cover or you find that getting covered again in the future is more expensive because of your increased age and any medical conditions you may have suffered in the interim.
When trying to work out whether you should cancel your Life Insurance, it’s worth ensuring you’re going in with all the facts.
This includes looking at the risk of death in the coming years, even as a totally healthy individual.
In the table below, we’ve laid out the chances of passing away in the next 15 years for a healthy non-smoking man aged 30, 40 and 50.
The Risk of Passing Away
1 in 47
1 in 23
1 in 10
Critical Illness Insurance is a type of cover that you can add on to your Life Insurance policy which will cover you for serious illnesses.
While having extra cover can be useful, it may not always be the best way to achieve your protection goals.
While Critical Illness Insurance can be a valuable protection product, Life Insurance with Critical Illness Cover has its flaws.
For instance, if you are ill and meet the definition to claim 100% of the sum assured, in most cases the policy will terminate, which means you won’t have any Life Insurance.
Instead, it might be wise to consider having your Critical Illness Cover and Life Insurance in two separate policies.
By doing this you can get a payout from both policies if you need them and claiming for a critical illness won’t stop your life cover.
Usually, insurers will let you stop your Critical Illness Cover without having your Life Insurance cancelled. However, you should speak to an adviser first to find out your options if you want to separate your combined policy.
If you are looking for an insurance that will cover illnesses and injuries to replace your Critical Illness Cover, you might consider Income Protection.
More people have CIC policies than Income Protection, even though Income Protection covers more causes of incapacity.
Income Protection also pays out monthly rather than paying out a lump sum, which can make it easier to manage your expenses while you’re ill.
With Income Protection and Life Insurance, you will have comprehensive cover that will protect you and your loved ones against injury, illness and death.
Cancelling Life Insurance is a big decision – one you may regret later on if you change your mind. The later you leave purchasing Life Insurance, the more expensive it becomes due to age and deteriorating health.
If you cancel your old policy, you might find yourself unable to buy another policy later on with the same level of cover for the same cost, so be careful and don’t be too hasty when it comes to cancelling your insurance.
For whatever reason you might want to have your Life Insurance cancelled, consider speaking to a financial adviser beforehand.
They may be able to help you find a more affordable alternative or show you more options to make your policy better suited to your circumstances.
We started Drewberry because we were tired of being treated like a number and not getting the service we all deserve when it comes to things as important as protecting our health and our finances. Below are just a few reasons why it makes sense to let us help.
If your reason for cancelling Life Insurance isn’t on this list, get in touch with our insurance advisers on 02084327333.
We can discuss your options and help you find the right insurer and policy to replace your policy, or modify any policy you would like to cancel, completely fee-free.
Director at Drewberry
Very professional, kept me informed at every stage, easy to communicate with, no stress!