Life insurance

JEvans_2

How do you go about canceling Life insurance.

I have had a better quote and better terms from another insurer.

Thanks

stephenni1971

Cancel your DD

InsideInsurance

You contact the company you bought it from (ie insurer or broker) and advise that you want to cancel

You certainly dont just:

stephenni1971 wrote: »

Cancel your DD

As this can lead to fees for failed transactions etc. Stopping payment is not the same as cancelling a service. I am sure you wouldnt accept your employers "informing" you that your fired simply by them cancelling your pay cheque

rs65

Make sure there are no penalties, such as commission clawback, before cancelling.

stephenni1971

InsideInsurance wrote: »

You contact the company you bought it from (ie insurer or broker) and advise that you want to cancel

You certainly dont just:


As this can lead to fees for failed transactions etc. Stopping payment is not the same as cancelling a service. I am sure you wouldnt accept your employers "informing" you that your fired simply by them cancelling your pay cheque

It's quick - it's simple.

I don't know of any life insurer that would charge for a missed DD as there is no legal requirement for the insured to pay it. The contract or term is legally enforceable on the insurer not the insured.

Only reason I say is that I have had many clients before call the insurer to cancel only to be given a whole waffle and sales pitch when it's clearly in the clients interest to change policy for any one of a number of reasons.

If you cancel a DD your bank will not change you as it was at your request. In addition the insurer will give you the benefit of the doubt and provide cover for an extra 30 days after the missed DD which can be useful were there to be a problem with the replacement policy in that time.

moo_juice

I am about to start a life insurance policy through a broker, I have to sign a clawback agreement, but it is one of the vaguest documents ive ever seen. It does not mention the charge for stopping the policy, how much the broker is getting, or the timeframe when a clawback period ends.

Are there any rules about these types of policies?

dunstonh

moo_juice wrote: »

I am about to start a life insurance policy through a broker, I have to sign a clawback agreement, but it is one of the vaguest documents ive ever seen. It does not mention the charge for stopping the policy, how much the broker is getting, or the timeframe when a clawback period ends.

Are there any rules about these types of policies?

The reason you are getting a clawback agreement is that if you cancel in the first 4 years, the insurer will clawback the commission. Typically on a pro-rate basis (usually annual i.e. full clawback in year 1, 75% in year two etc). However, it does vary with insurers.

It wont mention what the broker is getting as that would vary with each plan set up. Timelines will vary as well. However, it should ideally mention that you are only liable for the difference in clawback. Your personal illustration will show the commission amount. So, effectively that is what you are liable for in year 1.

If you want to have fixed amount, then either find a new adviser and go on fee basis with commission offset or ask this adviser to switch to fee basis with commission offset.