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Life Insurance Policy
Irrespective of the life insurance company you are currently dealing with, canceling your policy usually obliges you to carry out a lot of work than evade paying your policy's premiums. The time-span of canceling your life insurance policy usually depends on the insurer. But, the termination of your contract normally involves you performing few undertakings, such as contacting the insurer and preparing a comprehensive written request for the policy's cancellation. Below are the steps on how to successfully cancel your policy:
1. Evaluate Your Need For Life Insurance
Mull over on the circumstances that previously induced you to acquire a life insurance policy. Now, compare those circumstances with your present financial obligation to other people to ascertain that calling off your policy is indeed the suitable decision for you and your family. Make sure that you have adequate savings to support the needs of your dependents in case you die in no time.
2. Contact Your Life Insurance Provider
Notify your insurance provider about your decision to cancel your policy and give few details on how you came up with such decision. Take note of the alternatives to canceling your policy offered by your insurance provider.
3. Ask The Insurer About The Required Paperwork
Make an inquiry to your insurance provider about the paperwork needed in canceling your existing policy. If the insurer asks you to fill out a surrender form as a step of the termination process, you may ask them to send you a surrender form if the form is not obtainable on the company's website.
4. Complete The Surrender Form
If the insurance company does not compel you to complete a surrender form, just prepare a written statement of your request to terminate your policy. Put in your full name, policy number, the company's name and the exact date when you wish to terminate your coverage in the letter you write. Take in the sum of money you anticipate to obtain at the time the insurer cancels your life insurance plan if you have a cash value in your policy.
If you are not the exclusive owner of a policy, ask for the signatures of other policy owners before sending your completed surrender form or your written cancellation request to the insurer by means of registered mail.
5. Contact Your Tax Adviser
Speak to your tax adviser to find out the upshots and effects of terminating your life insurance policy. If you were able to obtain a reimbursement after canceling your cash value policy, the state may tax a fraction of your fund that goes over the premiums you have given to the insurer only to uphold your insurance as ordinary income.
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