Finder makes money from featured partners, but editorial opinions are our own.

Cancelling your life insurance

3 simple steps to cancel your life insurance policy.

How do I cancel my life insurance policy?

The process is usually straightforward. Here are the steps to follow:

1. Assess your decision

Take a moment to think about whether cancelling your life insurance is the right move for you. Once you cancel, all the premiums you've paid will be for nothing, unless you're still within your cooling off period (this typically only lasts for the first 30 days of your policy though).

If you plan to take out a new policy, keep in mind that if you've developed any health issues since you last took out cover, it will likely impact how much you pay. You'll also likely be charged more than before because you're older.

2. Notify your insurer

Once you've made up your mind, inform your insurer. Life insurance cancellations typically require written confirmation, rather than just a phone call. Your insurer should provide a cancellation form or link on their website.

3. Fill out the cancellation letter

Complete the necessary details in the provided cancellation letter. Once done, submit the letter to your insurer for processing.

Five things to consider when cancelling

  • Refunds within the cooling off period. You can cancel your cover within the specified cooling-off period and the premiums you have paid will be fully refundable.
  • Refunds after the cooling period. Premiums will not be refunded after the cooling period or if a claim has been made during the cooling-off period.
  • Cancelling at anytime. You can cancel your policy cover at any time, however, the premiums you have paid to date will not be refundable.
  • Refunds for policies in advance. If you pay your premiums in advance on a yearly basis, the coming year may be refundable minus any cancellation fees and stamp duties that are applicable.
  • Request in writing. You will be required to provide your request to cancel your policy in writing.
Gary Ross Hunter

Life insurance inside your super

I cancelled the life insurance inside my super when I was young for multiple reasons. I got a standard life insurance policy instead because it was better value for money for me.
— Gary Ross Hunter, insurance expert

Why do people cancel life insurance?

Many people do cancel their policies intentionally or due to non-payments. Some of the key reasons people cancel their policies include:

  • They can no longer afford premiums that increase with age
  • Insurers redesign the definitions and exclusions which increases the price
  • You move overseas permanently and prefer to have coverage with an insurer based in that country instead.

Should I cancel?

No one should ever feel like they are being weighed down by premium payments for insurance they do not need. Before cancelling, however, consider the following:

  • You may need life insurance in the future. Remember that your needs and circumstances change over time. In later years it may be more difficult to get a new life insurance policy. Your age and current health conditions are two important factors that determine the level of premiums you pay. The older you are the higher your premiums will be, with an increased chance of paying additional loading for new medical conditions. The cost of life insurance increases dramatically after the age of 45. By age 60 your premiums will be about six times higher than when you were 40
  • How much have you paid premiums already? Cancelling life insurance won't result in a premium refund. This could mean loosing thousands of dollars you have already invested into a policy.
  • Would your dependents be financially secure without you? Consider how your family would support themselves if you were to suddenly pass away. Are your savings enough to cover mortgage repayments, daily living costs, education, health insurance, funeral costs and everything else?

How to pay less by restructuring or switching your life insurance policy

If financial strain is your main reason for closing a life insurance policy, consider reducing, restructuring or even switching policies instead. This can give you a more affordable policy without surrendering all cover and losing any benefits or discounts you may have accrued. Some of your options include:

  • Reduce your sum insured. Reducing the amount of cover can help you save big, but before doing so consider having a full medical examination. If something potentially serious comes up then reducing the sum insured might be risky. Changing insurers would also be difficult as they might require further medical testing and may raise premiums even higher in response.
  • Drop some features of your cover If your existing life cover plan has trauma and/or TPD cover, look into dropping those altogether to reduce costs. Instead, consider income protection insurance to cover your earning capabilities in the event of an illness or injury, or simply rely on workers compensation and business insurance to cover you where it can.
  • Change your indexation rate. Most life insurance premiums will be indexed for inflation at a minimum rate of 5% a year, but you can request a lower indexation rate from your insurer. This can lower premiums, but means your coverage will not be keeping up with inflation and may be worth less if you make a claim.
  • Decrease your benefit period. This can also lower premiums significantly. This is the maximum amount of time a policy will pay out in the event of disablement or loss of income.

Why you can trust Finder's life insurance experts

freeYou pay nothing. Finder is free to use. And you pay the same as going direct. No markups, no hidden fees.
expert adviceYou save time. We spend 100s of hours researching life insurance so you can sort the gold from the junk faster.
independentYou can trust us. We say it like it is. We aren't owned by an insurer and our opinions are our own.

Frequently asked questions

Gary Ross Hunter's headshot
Editor, Insurance & Innovations

Gary Ross Hunter was an editor at Finder, specialising in insurance. He’s been writing about life, travel, home, car, pet and health insurance for over 6 years and regularly appears as an insurance expert in publications including The Sydney Morning Herald, The Guardian and Gary holds a Kaplan Tier 2 General Advice General Insurance certification which meets the requirements of ASIC Regulatory Guide 146 (RG146). See full bio

Gary Ross's expertise
Gary Ross has written 730 Finder guides across topics including:
  • Health, home, life, car, pet and travel insurance
  • Managing the cost of living
William Eve's headshot
Co-written by

Group publisher

Willam Eve is the country manager for Finder's Canada operations. He has previously held the positions of group publisher of insurance for Finder Australia and lead publisher for the Finder global team. William has a Bachelor of Communications from the University of Technology Sydney, Australia. He loves the challenge of launching Finder into new markets while helping grow Finder’s global team. See full bio

More guides on Finder

Go to site