How can I cancel a life insurance policy prematurely?
June 6, 2022 | 40,00 EUR | answered by Katrin Sontheimer
Dear Insurance Law Attorney,
My name is Hanna Tressel and I have a question regarding my life insurance policy. Several years ago, I took out a life insurance policy to financially provide for my family in case of my death. However, my financial circumstances have changed recently and I urgently need the money from the life insurance policy.
My life insurance policy still has a few years left, but I would like to know if it is possible to cancel it prematurely. I am concerned that cancelling it early could result in high losses or penalties. Are there any ways to terminate the life insurance policy early without suffering financial losses?
I would like to know from you what steps I need to take to cancel the life insurance policy early and what impact this could have on my financial situation. Are there any alternatives to early cancellation that would be more advantageous for me? I am grateful for your guidance and expertise on this matter.
Thank you in advance for your assistance.
Sincerely,
Hanna Tressel
Dear Mrs. Tressel,
Thank you for your inquiry regarding your life insurance policy. It is understandable that your financial situation has changed and you need the money from the life insurance policy. Indeed, it is possible to terminate a life insurance policy prematurely, however, you should be aware that this usually involves financial losses.
If you terminate your life insurance policy prematurely, you may lose a portion of the premiums paid or even have to pay a cancellation fee. This depends on the contract terms of your life insurance policy. Before terminating early, it is advisable to carefully review the contract documents and get informed about the exact conditions.
There are alternatives to prematurely terminating your life insurance policy. One option would be to sell the life insurance policy. There are companies on the secondary market for life insurance that can offer you an early payout, but at a lower amount than the actual insured sum. Again, it is important to do thorough research and compare different offers.
Another option would be to let the life insurance policy lapse. This means that you temporarily stop paying premiums, but do not cancel the contract. This way, you can reactivate the life insurance policy later if your financial situation improves.
Before making a decision, I strongly recommend seeking advice from a professional. An experienced insurance advisor or attorney specializing in insurance law can help you find the best solution for you and protect your financial interests.
I hope this information is helpful and I am available for any further questions.
Sincerely,
Katrin Sontheimer
Insurance Law Attorney
