Life assurance – ending the policy?

I no longer need the financial cover that a current life assurance policy provides, but when I phoned to cancel the company told me “you might not want to end the term early, speak to an FA, but sorry we can’t tell you why”.

So er, why?

Might be as simple as that would constitute giving you financial advice and if they aren’t qualified to do that, then it could have issues down the line.

No, I mean why shouldn’t I end it before its term concludes?  There’s not Payout or refund, and it no longer has security over any debt so what’s the point in continuing to pay for it?

Presumably if you change your mind in a few months and decide you want an extra policy again, the cost will be more than you are paying now due to your older age at the point of taking out a new policy

Mrs Kryton bought any dodgy ladders/ unguarded rotating machinery for you recently?

The regulator puts pressure on insurers to stop consumers making rash decisions. Hence the hoops they try and make you jump through. Just cancel the DD and the policy will end.

Will it not still payout even if the debt has been settled? Our mortgage ones read like they cover the mortgage amount on the expected term. If we were to overpay/pay off earlier the policy would still be worth what the the mortgage would have been at the point. Seems like this could provide a nice payment in the event one party died.

DickBarton+1

If it has either terminal or critical illness cover included then it’s possibly better to keep that policy than to start a new terminal or critical illness policy, which is one reason for them suggesting the IFA

When you’re sure that you don’t need it then stop paying for it.

Ref above yes – if you have a basic policy that pays off the mortgage then it’s linked to your normal mortgage term and therefore will overpay if you have paid off more of your mortgage than expected. That’s why I’m keeping mine for now even though I don’t 100% need it any more.
On the subject what do people think about Income Protection? Mine costs over £100 per month, with no investment payback. I’m thinking that once I’m over 55 and could access my pension if I needed to (and mortgage will be just about paid off) then I’ll cancel it.

Meaningful money podcast, he s an ifa, had a client who cancelled his critical illness cover, got ill and tried to claim.  Obviously unsuccessful, apparently client had had the policy for ages.  It was deemed client had full knowledge.

The only life policy I d keep is if it were a whole of life policy written in trust, as it falls outside your estate for iht.

Is it a with-profits policy?

I’ve never had a personal life assurance policy, always had cover through work with payout of something like 4x salary on death.

Is there a surrender value for the policy?

The comments already made are spot-on. Company does not want you to rashly cancel a policy. They can’t advise you on what’s best for you hence ‘speak to your IFA’. If you want to cancel you can. Just make sure you know what the consequences are.

Me and SO did similar the other year. No need to retain our life assurance policies as all the things they were in place to cover were dealt with.

On the subject what do people think about Income Protection? Mine costs over £100 per month, with no investment payback. I’m thinking that once I’m over 55 and could access my pension if I needed to (and mortgage will be just about paid off) then I’ll cancel it.

I did similar with some critical illness policies this year. Instead I put the money into more AVCs.

On the subject what do people think about Income Protection?

Stating the obvious but it’s insurance, like any other. It depends on your job security, employed/SE, ease of finding a new job, willingness to travel, etc.

My circumstances meant that I didn’t feel that the risk justified it, YMMV