Can I cancel my life insurance policy early?
June 16, 2022 | 40,00 EUR | answered by Sophia Evers
Dear Sir or Madam,
My name is Christian Busch and I have a question regarding life insurance. Several years ago, I took out a life insurance policy to financially provide for my family in case of my death. Unfortunately, my financial situation has deteriorated significantly in the past few months and I am no longer able to afford the premiums for the life insurance policy. I am worried that I may not be able to maintain the insurance anymore and I am wondering if it is possible to cancel the life insurance policy prematurely.
I have already tried to speak with my insurance company, but I am not sure if I have received the correct information. I want to make sure that I am aware of all my options before making a decision. Can I cancel my life insurance policy prematurely? Are there possibly alternative solutions that would allow me to keep the insurance in force or at least receive a portion of the premiums already paid?
I would greatly appreciate any help and support as the financial burden of the life insurance policy is causing me great concern. I hope that you can assist me with your expertise and provide me with clear information and advice.
Thank you in advance for your assistance.
Sincerely,
Christian Busch
Dear Mr. Busch,
Thank you for your inquiry regarding life insurance. It is understandable that you are concerned about your financial situation and are looking for solutions to either maintain your life insurance or at least recover a portion of the premiums paid. I will provide you with as detailed information as possible in response to your questions.
In general, it is possible to cancel a life insurance policy prematurely. However, you should be aware that early termination usually involves financial losses. In the initial years after the contract is signed, high initial and administrative costs may be incurred, which can be lost to a significant extent or even entirely in the event of early termination. Additionally, if you cancel your policy early, the surrender value of your insurance may only be paid out to you to a limited extent.
Before making a decision to cancel, it is advisable to carefully consider if there are alternative solutions available. Some insurance companies, for example, offer the option of suspending premium payments. This means that the insurance is temporarily suspended without the need to pay further premiums. This could be an option if your financial situation is only temporarily strained and you wish to resume the insurance at a later date.
Another option is to sell your life insurance policy to a third-party buyer. This is known as a policy sale or purchase and may potentially offer you a higher surrender value than early termination with your insurance company.
To explore all options and make the best decision for you, I strongly recommend that you consult with an experienced insurance law attorney. A specialist can review your contract documents, provide guidance, and assist you in making the right decision that aligns with your financial interests.
I hope this information is helpful and supportive in your situation. If you have any further questions or require legal assistance, I am at your disposal.
Best regards,
Sophia Evers
Insurance Law Attorney
