Cancelling term life insurance policies paid annually, will I get a refund

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eye.surgeon
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Cancelling term life insurance policies paid annually, will I get a refund

Post by eye.surgeon » Thu May 17, 2018 11:20 pm

I am replacing 2 term life insurance policies, one with Northwestern Mutual and the other NY life, with a single lower-rate policy. I've paid these premiums annually unfortunately. My new insurance agent is telling me they will refund my unused premiums, but a search here and a google search seems that may or may not be true. Any experience here getting refunds on an annual premium of a cancelled term life insurance policy? It's several thousand dollars.
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Pajamas
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Re: Cancelling term life insurance policies paid annually, will I get a refund

Post by Pajamas » Thu May 17, 2018 11:35 pm

What do the policies say about refunds?

123
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Re: Cancelling term life insurance policies paid annually, will I get a refund

Post by 123 » Thu May 17, 2018 11:49 pm

Most insurance companies refund premiums for policy periods in which the insurance is not in effect. For example if a death occurs and premiums are still being paid on the policy the insurance company prorates and refunds the premium for the premium period after the death, they are refunding the "unearned" premium. Same rule should apply if you cancel your policy.
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BruDude
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Re: Cancelling term life insurance policies paid annually, will I get a refund

Post by BruDude » Thu May 17, 2018 11:52 pm

Depends on the insurance company, some don't refund the excess premium.

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eye.surgeon
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Re: Cancelling term life insurance policies paid annually, will I get a refund

Post by eye.surgeon » Thu May 17, 2018 11:59 pm

Pajamas wrote:
Thu May 17, 2018 11:35 pm
What do the policies say about refunds?
I've looked through the policy and don't see this issue addressed. I thought perhaps others here might have personal experience doing this.
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BruDude
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Re: Cancelling term life insurance policies paid annually, will I get a refund

Post by BruDude » Fri May 18, 2018 1:06 am

eye.surgeon wrote:
Thu May 17, 2018 11:59 pm
Pajamas wrote:
Thu May 17, 2018 11:35 pm
What do the policies say about refunds?
I've looked through the policy and don't see this issue addressed. I thought perhaps others here might have personal experience doing this.
You need to call each company and ask them.

MrsBDG
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Re: Cancelling term life insurance policies paid annually, will I get a refund

Post by MrsBDG » Fri May 18, 2018 1:19 am

Yep, call them. Most companies will refund as of the next policy date of the month, for example if your policy was issued October 4th and you cancel May 23rd, they might refund premiums covering the time period after June 4th. Some companies will require advance notice of some random amount, so might refund premiums covering the time period after July 4th.

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Pajamas
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Re: Cancelling term life insurance policies paid annually, will I get a refund

Post by Pajamas » Fri May 18, 2018 1:30 am

eye.surgeon wrote:
Thu May 17, 2018 11:59 pm
I thought perhaps others here might have personal experience doing this.
Someone else's personal experience might not even be applicable to your own policies if they lived in the same state and had a different policy from the same company. You need to check with the agent or customer service rep for that company.

KT785
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Re: Cancelling term life insurance policies paid annually, will I get a refund

Post by KT785 » Fri May 18, 2018 8:42 am

Anecdotal experience: I cancelled my previous AIG 30 year policy early in the term to replace with a cheaper Prudential option (best rate class) and was similarly curious about the refund since I got conflicting information online.

I called AIG about cancelling once the Prudential policy was active and they told me the amount I should expect to receive back as a refund . . . and got the check a few weeks later. Process was pretty seamless, but I'm sure this depends on the company.

boglegirl
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Re: Cancelling term life insurance policies paid annually, will I get a refund

Post by boglegirl » Fri May 18, 2018 9:57 am

We cancelled a policy (USAA) and received a refund within days.

I think some of this depends on state law, too. OP, please just call your insurer as there are too many variables.

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