Once upon a time, you purchased a whole life insurance policy. At the time, you most likely had a need for it and it was a wise financial investment.
But maybe now, times have changed and so has your situation. Maybe you no longer have a need for your whole life insurance policy, or maybe you can no longer afford the premiums, and you’re wondering how you can cancel your whole life insurance policy.
Since you’ve already put so much money into the policy that would be a significant benefit to your family if you passed, so it’s worth looking into ways you can keep your coverage.
According to NerdWallet, canceling a permanent life insurance policy (like whole life) is more involved than canceling a term life policy. 1
To cancel a term life policy, all you have to do is stop paying your premiums, however, the process for canceling a whole life policy can be a bit more involved..1
NerdWallet tells us that when you surrender a permanent life insurance policy, the insurer will give you the surrender cash value (minus surrender fees). 1
If you wish to cancel your whole life policy, Life Ant tells us that because whole life insurance policies vary, “you’ll need to get your insurer on the phone and talk about your options.”2 Life Ant notes that there are a few important things to consider before you cancel a whole life insurance policy, since “you’ve already put so much money into the policy that would be a significant benefit to your family if you passed, so it’s worth looking into ways you can keep your coverage.” 2 Life Ant gives an example of using the cash you’ve accumulated to pay your premiums to retain your coverage, and notes that if you cancel within the first few years of the policy, “you are unlikely to get the cash value of your policy back at all and may pay steep penalties.” 2
Before you cancel your whole life insurance policy, make sure you understand what a cancelation would entail, including leaving your beneficiaries without a life insurance benefit. Speak with a financial advisor or a licensed life insurance agent to fully understand all of your options, especially because you might have choices other than simply canceling your policy.