How to Write a Life Insurance Cancellation Letter: 5 Examples

Bob Phillips, BA in Sociology

Licensed insurance agent

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Have you ever had to cancel something you were paying for each month, like a gym membership or a magazine subscription? What kind of experience did you have?

Sometimes when you cancel something, the entity you’re canceling with can make it difficult by trying to sell you something different or entice you to stay for a lower price, or by asking the dreaded “Why?” question.

Fortunately, canceling a life insurance policy is as easy as writing a letter. Unless you want to, you won’t need to talk with anyone on the phone, particularly the agent who sold you the policy and could be getting charged back some of their commission money.

After reading this article, not only will you have some examples of cancellation letters, but you’ll know what to include in your cancellation letter.

Jump ahead to these sections:

When Do You Need to Write a Letter to Cancel Your Life Insurance Policy ?
What Should You Include in a Life Insurance Cancellation Letter?
Steps for Writing a Life Insurance Cancellation Letter
Life Insurance Cancellation Letter Examples
Frequently Asked Questions About Cancelling a Life Insurance Policy

When Do You Need to Write a Letter to Cancel Your Life Insurance Policy ?

The answer to this question depends on what type of life insurance policy you want to cancel.

For a term life policy, you could just not pay the premium when it’s due and let the insurance company cancel the policy for non-payment. You could also call the agent or life insurance company and cancel, or you could write the insurer a cancellation letter.

For a permanent type of life insurance policy, like whole life, it’s a little more complicated regarding when it comes to canceling a life insurance policy . This is because whole life insurance policies not only have a life insurance protection element, as does term life, but whole life also has a cash value component. Some of your monthly premium payment goes into a special account and accumulates value over time, kind of like a savings account.

When you cancel your whole life insurance policy, you can receive some of your money back if you’ve had the policy long enough. The amount of money you’ll receive is the “surrender value” of the policy. You won’t get all of your premiums back, but you will get some.

With whole life insurance, you have a couple of other options besides canceling. You can let the cash value that’s accumulated in the policy pay your premiums until the money runs out, or you can stop paying your premiums and keep the whole life policy with a reduced death benefit.

So when do you need to write a cancellation letter for a whole life insurance policy to life insurance companies ? The best answer to that question is every time. Though it’s optional, even if you cancel by phone, it’s wise to confirm the cancellation by sending the insurer a cancellation letter. But again, it’s not necessary with a term life insurance policy.

What Should You Include in a Life Insurance Cancellation Letter?

Once you’ve decided that you want to cancel your life insurance policy and send that notification to the life insurance company, you’ll need to know what information you need to include in your cancellation letter. Here’s what to have:

The date you wrote the letter
Your name and mailing address
The insurance company’s name and mailing address
The department you are sending the letter to (normally Cancellations Dept.)
The policy number
The body of the letter informing the insurance company of your wish to cancel
The date you would like the cancellation to become effective
A request that the insurer confirm your cancellation in writing
Your signature

Steps for Writing a Life Insurance Cancellation Letter

There are six steps you’ll need to take as you write your cancellation letter:

Find your policy (you’ll need the policy number)
Get the mailing address of the life insurance company
Get the life insurance department name you should direct your letter to
Write your letter
Make a copy of your letter for your files
Mail the letter (mail it “Return Receipt Requested” if you want confirmation that the life insurance company received it)

Life Insurance Cancellation Letter Examples

Now that you know when and how to write a letter to the life insurance company to cancel your life insurance policy, seeing some examples will pull everything together for you. Here are five:

Sample 1

Bradley Filmore
4567 Drawbridge Rd.
Lafayette, CA, 86709

Trusted Benefit Life Insurance Company
156 Maple Ave.
Philadelphia, PA, 19007

Attn: Cancellations Department

RE: Life Insurance Policy #3697503

Please consider this letter as a formal request to cancel the above-referenced life insurance policy effective August 31, 2021. In addition, please stop all debits or charges for premium payments.

I am also requesting written confirmation of this cancellation and the return of any unused premiums. In addition, the cash value of the policy should also be sent with any returned premium. This action needs to occur within 30 days from the receipt of this letter.

Sample 2

National Mutual Life Insurance Company
Attention: Cancellation Department
8512 Maryland St.
Columbia, MD 21097

Re: Cancellation of Policy Number: 6970325

To Whom It May Concern:

The purpose of this letter is to inform you that I have decided to terminate my life insurance coverage effective immediately.

The reason for my decision is based on finding a more comprehensive policy for a lower cost. Please send me a written confirmation of the cancellation for my records at your earliest convenience.

Lee Loughnane
672 Chicago St.
Great Bend, Indiana 42586

Sample 3

Attn: Cancellation Department
Universal Benefit Life Insurance Co.
672 Discovery Blvd. New York, NY 10027

Re: Cancellation of Life Insurance Policy #286471

To Cancellation Department:

I regret to inform you that I, Penelope Mason, have decided to terminate my life insurance coverage effective immediately.

The reason for my decision is based on losing my job and being unable to pay premiums. Please send me a written confirmation of the cancellation for my records at your earliest convenience.

Penelope Mason
158 Euclid Ave.
San Diego, CA 91954

Sample 4

Texas Life Insurance Company
677 James Street
Dallas, TX 76943

Attn: Texas Life Insurance Company Cancellations Department
Re: Cancellation of Life Insurance Policy #459203

To whom it may concern,

This letter is a formal request to cancel the life insurance policy referenced above.

Please stop all debits or charges for future premium payments upon receipt of this letter.

I would like to cancel the policy immediately. Therefore, I am requesting the refund of any unused premiums within a period of 30 days from the receipt of this letter and a written confirmation of the cancellation for my records at your earliest convenience.

Thomas Tanner
90378 Oliver Circle
Tampa, FL 33676

Sample 5

Andrea Gilbert
676 Idaho Ave.
Kansas City, MO 58947

Trans Union Life Insurance Company
67294 Broad Avenue
Birmingham, AL 86377

Attn: Cancellation Department
RE: Life Insurance Policy #759824

Please allow this letter to constitute my formal demand for cancellation of the above referenced life insurance policy. Please make this cancellation effective as of August 15, 2021. I am also requesting written confirmation of this cancellation, along with a refund for unused premiums, within 30 days from the receipt of this letter.

Frequently Asked Questions About Cancelling a Life Insurance Policy

Here are some questions that people often ask about canceling a life insurance policy:

Do I get any of my money back when I cancel my life insurance policy?

If it’s a term life insurance policy, you won’t be receiving back any of the premiums paid, no matter how long you’ve been paying them. However, if you cancel in the middle of a billing cycle, you should get a refund for the period of time between your date of cancellation and your next premium payment date.

With whole life insurance, you may get some money back, depending upon how long you’ve been paying for the policy. Typically, in the first 2-3 years, your policy has no “surrender value.”

Each year after that, you can get back a percentage of the accumulated surrender value (which will be less than the premiums you paid for the policy). Your life insurance policy will have a detailed breakdown of surrender charges deducted from your policy’s cash value if you cancel your policy.

What are the most common reasons people cancel their life insurance policy?

There are many different reasons people cancel their policy. Some of those are:

They can no longer afford the premiums
They no longer need the policy (i.e., the kids graduated college or the mortgage is paid off)
They found more affordable coverage elsewhere
They want to get the cash value out of a permanent life insurance policy, such as whole life insurance or universal life insurance
Some people cancel for life insurance and divorce

Can my life insurance company cancel my policy?

Your life insurance company cannot arbitrarily cancel your policy unless they have a specific reason written into your policy contract. The two reasons are:

You didn’t pay your premiums. Your policy should be paid on the due date, but life insurers give you a 30-day grace period when you can still pay your premium and not have the policy canceled, even though you were late paying it.
You were intentionally dishonest in your application. In essence, you committed a fraudulent act if you knowingly provided misinformation that would have caused the insurer to reject your application or charge you additional premiums because you weren’t truthful about factors like your smoking status or your health history.

A Final Thought

Canceling life insurance is relatively easy to do, but be aware that you will be giving up financial protection for your family that you once had a reason for buying. Before canceling, consider discussing your reasons for wanting to cancel with a trusted friend or a financial advisor.