How To Cancel Money Back Policy Before Maturity?
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There are times when insurance buyers get bewildered while purchasing a life insurance policy, and they end up buying the incorrect policy. There’s no such thing as an incorrect policy. But buying a life insurance policy that doesn’t align with your financial goals may turn out to be a poor financial instrument. If you feel that you have purchased the wrong life insurance policy and are now concerned about what to do next, there is no need to worry.
Reasons for Cancelling a Money Back Policy
Money back insurance policies offer the much-required cover of protection to you and your loved ones in case of any unfortunate event. While everyone needs to have a money back insurance policy, there can be an array of reasons why you prefer to withdraw your policy. Some of the reasons for a money back insurance plan cancellation are mentioned below:
- If you have foreclosed all your existing loans and hold enough buffers to safeguard your family on your own, you can cancel a life insurance policy.
- If you do not hold enough funds to pay the premium amount, you can cancel your life insurance plan.
- You can also cancel a policy when you think you have purchased the wrong policy and deplore purchasing it.
- You have discovered a life insurance plan that extends more dependable coverage at a more economical price.
How to Cancel a Money Back Insurance Policy?
Mentioned hereunder are a few steps on how you can cancel your Money Back insurance policies.
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Talk to your policy provider
The most suitable way for a money back insurance plan cancellation is to talk to your policy provider and inform them why you do not wish to continue with your policy. Informing the policy provider about the cancellation can make the whole process easier.
Also, if the high amount of premium is the main concern due to which you wish to cancel the policy then, the policy provider can also work out resolving this problem so that there is no need for canceling the policy.
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Stop paying the premium amount
If you stop paying the premium amount of your money back insurance policy even after the grace period provided by the policy provider, then your life insurance policy will automatically stand cancelled. However, this non-payment of premium is usually not the right practice, and you must always inform the policy provider about the cancellation decision.
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Cash-out your whole money back policy
Cancelling a money back insurance policy can be a challenging task. If you hold money back insurance, then, in that case, the best way to cancel that policy is to cash out that policy. The most beneficial part of this money back insurance is that it owns a cash surrender value along with a surrender period.
If the policyholder cancels the policy within this surrender period, you can receive the entire sum after deduction of the penalty amount.
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Cancel the insurance policy during the free look period
Another way to cancel your money back insurance policy is to withdraw it during the free look period. A free look period is a term of 10 to 30 days where the policyholder can cancel the life insurance policy and will get a complete refund of the premium paid without much paperwork.
Can You Get A Refund When You Cancel A Money Back Insurance Policy?
While the money back insurance plan cancellation process seems easier, people usually face problems while actually doing so. Hence, before cancelling an insurance policy, you must keep in mind that even if you are paying the insurance premium for years, you will not receive any amount as a refund.
Apart from this, you will not even get the policy coverage once you cancel your life insurance policy. If you reapply for a new money back insurance policy, you will have to go through the complete application procedure again. In addition to this, the policy provisions of the term life insurance policies further hold the right to forfeit the entire premium amount.
Conclusion
Money back insurance policies are a positive move towards long-term economic devising and protecting your family. Hence, you must ensure that you never decide on purchasing a life insurance policy in haste.
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