If you purchase a term life insurance policy you are not locked into the policy. You can make changes to the policy or cancel the policy at any time without incurring any penalties or fees.
It is actually a very common question that we receive regarding term life insurance policies. Since term life insurance is purchased in the length of years (e.g. 10 year term, 20 year term, etc) many people assume that they must keep the policy for the entire length of the term.
There are two ways that you can cancel your term life insurance policy.
Stop Making Payments. The insurance company provides a grace period which is a period of time where your policy can stay in force without paying premiums. Once the grace period is up then your insurance policy will be cancelled. For example, the grace period could be 60 days. If you have not made a payment on your policy within 60 days then your policy will be cancelled. This obviously may not be a good thing, but if you don’t want to have your insurance policy anymore then just stop paying and the policy will “lapse” and no longer be in force.
Cancellation / Surrender Letter. You can write a letter to the insurance provider with your name, date and policy number requesting that they cancel your policy immediately. You can also contact the insurance provider or your agent to fill out a cancellation or surrender form to cancel the policy.