Steps to Canceling Your Life Insurance Policy

Canceling a life insurance policy is a relatively easy process.

Regardless of the company you currently maintain your life insurance policy with, canceling your life insurance will typically require you to do more than stop paying your contract's premiums. While the steps you must take to successfully cancel your life insurance policy depend on your insurance carrier, terminating your policy generally involves you completing a few simple tasks, such as communicating with your carrier and preparing a detailed written request for the policy's cancellation.

Step 1

Evaluate your need for life insurance. Compare the circumstances that originally motivated you to obtain insurance with your current financial responsibility for other people to ensure canceling your policy is the right decision for you and those who depend on you for their well-being. Ensure your accumulated assets are sufficient to provide for your dependents in the event of your death.

Step 2

Contact your insurance carrier. Inform your carrier of your desire to cancel your life insurance contract and explain the rationale behind your decision. Listen to the alternatives to canceling your policy mentioned by your insurance carrier. If you have a cash value policy and can no longer afford to pay the contract's premiums but still need insurance, for example, your carrier may be able to continue insuring your life by using your policy's cash value to buy term life insurance.

Step 3

Ask your insurance carrier what paperwork is necessary to cancel your life insurance policy. If your carrier requires you to complete a surrender form as part of the termination process, request that one be sent to your address if the form is not available on the company's website.

Step 4

Complete the surrender form yourself. If your carrier does not mandate that you fill out a surrender form, prepare a written statement of your request to cancel your policy. Include your name, policy number, your carrier's name and the precise date you desire your coverage to end in the letter you write. Include the amount of money you expect to receive at the time your carrier terminates your coverage as well if you own a cash value policy and a request that your carrier confirm the accuracy of your estimation. If you are not the sole owner of your life insurance policy, obtain the signatures of all of the policy's owners before sending either the completed surrender form or your formal cancellation request to your insurance carrier via certified or registered mail.

Step 5

Contact your tax adviser to learn about the consequences of canceling your life insurance policy. If you receive a refund after canceling your cash value contract, the Internal Revenue Service may tax the portion of your refund that exceeds the premiums you paid to maintain your insurance as ordinary income.


Canceling a life insurance policy is a serious, irreversible action. Obtaining coverage in the future may not be possible if your health status changes or deteriorates. It is important to discuss the motivation for your decision and your possible future needs with your family and your financial adviser or insurance agent before terminating your current policy.