How Can I Cancel My Life Insurance Policy?

Published: April 3, 2018

People cancel their life insurance policy for various reasons, for example you might be getting divorce, or your premiums have become too expensive, or your life has changed so dramatically that you need a completely new type of insurance policy.

Whatever your reason, you now want to find out how exactly to go about cancelling and whether you’ll get any money back.

You can cancel a term life insurance policy in Australia at any time, as long as you inform your insurer in writing that you want to end your policy. You should be allowed to cancel at no charge and if you paid your premiums in advance or cancelled during the ‘cooling off period’, you are generally entitled to a refund of those premiums.

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Key Summary:

Before you cancel your cover, take a few moments to compare quotes from some of Australia’s top life insurance companies to see if you can find cheaper premiums. If you’re retired and looking for alternatives to life insurance, we’ll also help you to compare funeral insurance plans.

3 Steps to successfully cancelling your life cover

  • Step 1

    Make sure you’re confident you want to cancel. Evaluate your need for life insurance by reviewing your current financial responsibilities. Ensure you have enough money set aside to provide for your dependents in the event of your death.

  • Step 2

    Contact your life insurance company. You generally can't cancel over the phone. However, you should call them to confirm you have the correct policy information and that you intend to cancel your policy. They'll then make a note of this on your account.

  • Step 3

    Write a letter expressing your desire to cancel and ask that you receive confirmation that your request has been actioned and your policy stopped. 

Another option might be to simply stop paying your premiums and inform your bank to stop any debit orders going off. However, you’ll likely be charged banking fees for bounced debits.

Be sure to review your Product Statement Disclosure (PDS) before cancelling. There may be additional steps that you need to follow, so make sure you read the section about ‘cancelling your policy’ very carefully.

Cancellation forms for life insurance companies we compare

  • TAL - Change my details form: Review point number 3.
  • AIA - Lost policy declaration form.
  • AMP - Application for alteration to policy form.
  • Asteron - Sold to TAL. Contact TAL.
  • OnePath - Application to cancel and replace from.
  • BT - Cancellation policy.
  • Clearview - Policy cancellation request form.
  • CommInsure - Life insurance forms
  • MLC - Replacing your existing insurance form
  • MetLife - Enquiries for cancellation

While cancellation forms can generally found on your insurer’s website, some insurers might not mandate that you fill out a form, in which case you need to prepare a written statement requesting your cover be cancelled. 

What needs to be on your cancellation of insurance policy letter?

  • Your full name, surname and date of birth
  • The insurer's name and the policy you want to be cancelled
  • Your policy number
  • The precise date you want your coverage to end
  • Whether you are the sole owner of the policy
  • The reasons for wanting to cancel cover
  • Include the amount of money you expect to receive for premiums paid in advance
  • Obtain the signatures of all the policy owners, and
  • Include the dates when signatures were provided
  • End with your contact details and your desire for a follow-up confirmation

After your policy has been cancelled, you should receive a notice from the insurer advising you of the status.

What happens when you cancel a life insurance policy?

When you cancel a term life insurance policy, you'll no longer have to pay premiums and won’t be protected by the insurer, meaning no death benefit can be claimed. Term life premiums will not be refunded when cancelling after the cooling off period. Once your cover is cancelled, contact your bank to stop all direct debit orders from that insurer.

The consequences of cancelling your life insurance

  • You will lose all the premiums that you’ve already paid unless you paid in advance or cancel during the cooling off period.
  • You and your family might be financially vulnerable. If you have dependents and pass away without a life insurance policy in place, your family could be left paying for your funeral, outstanding bills, mortgage, and other living expenses.
  • Cancelling and taking out life cover later could be more expensive. If you decide to take out cover again in future, your premiums might be higher because you’ve gotten older.
  • You might not get accepted. When applying for life insurance later, and your health has gone downhill, then you might be at risk of receiving a policy loading or exclusion or being declined altogether.

Switch Life Insurance Policies

If I cancel my life insurance do I get money back?

No, term life policies have no cash-value component, so you can’t get any money back.  However, you could get a refund on premiums paid within the cooling off period or if you’ve paid in advance, as long as you haven’t made a claim.

If you’ve paid your premiums a year in advance, then you could get a refund minus any cancellation fees and stamp duties for that year's premiums. 

What is the life insurance cancellation period?

A life insurance cooling off period refers to the amount of time you have to consider whether you want the policy or not. This period is also, also known as the cancellation period, varies from insurer to insurer and generally ranges from 14 days to 30 days. If you cancel your policy within the cancellation period without having lodged a claim, all premiums will usually be refunded.

Can an insurance company cancel my policy without notice?

No, an insurance company won’t cancel a life insurance policy, unless you’ve stopped paying your premiums. If you do not pay the overdue premiums within the grace period, your policy will terminate, and you will not receive any money back.

When should I consider cancelling my life insurance policy?

There are circumstances when life insurance doesn’t make sense and cancelling your cover is the better option, for example:

  • Your lifestyle has changed dramatically. You've gotten married, started a family or retired and have very different insurance needs that your current policy doesn't provide for.
  • When you’re 65 and older and no longer have financial dependents, mortgage payments or outstanding debts, and already have a funeral policy in place.
  • You want to replace your policy or switch to a different insurer.
  • You’re moving overseas. Generally, life insurance in Australia doesn’t cover you when immigrating.
  • You experience buyer’s remorse. If you just bought a policy and after reading the documentation decide it’s not the best fit, then rather cancel during the cooling off period.

Do not cancel your policy if you want to change companies until your new cover has been accepted and commences.

Alternatives to cancelling your life cover

If your reason for cancelling is because you can’t afford the premiums, you have options:

  • Change to another insurer: By comparing quotes from other insurers, you might find a cover that's more affordable.
  • Reduce your cover amount: Restructure your policy and reduce your insured amount to lower your premiums.
  • Premium freeze: Select insurers will freeze your policy at its current premium price to help you maintain its affordability. However, your insured amount will decrease every year as a result.
  • Remove CPI increases: You can ask that the insurer removes this built-in benefit that helps your cover keep up with the cost of living.
  • Suspending your cover: Select insurers will provide you with the option to suspend your cover when going through financial hardship. When you've become unemployed or need to go on maternity leave, you can temporarily suspend cover and not pay for premiums.

Frequently asked question and answers

Can you cancel a term life insurance policy at any time?

Most people cancel because they feel premiums have gotten too expensive. If you decide you want to cancel your life cover, you can do so at any time. However, if you cancel after your cooling off period, no premiums will be refunded, unless you paid in advance.

Do you get your money back at the end of a term life insurance policy?

No, a term policy does not have a cash component like a whole life insurance policy does. In Australia, whole life policies are no longer available due to it being too complicated and expensive. When your term policy has reached its expiry date, it will stop.

What happens if you outlive your term life insurance?

Most term life insurance policies in Australia only expire at your age 99 or 100. If you outlive your term life insurance policy, your cover will end. However, at age 99 a funeral policy might be better suited to your needs, mainly because premiums at that age will be thousands of AU dollars.

What happens to a term life insurance policy when it expires?

When a term life insurance policy expires, your coverage ends. This means that you cannot claim from the policy and you will no longer pay premiums.

What happens if you stop paying your life insurance policy?

Your life insurance policy will generally lapse if you've missed your premium payments. Meaning, your life insurance contract will end, and no death benefit will be provided should you claim.

If you’re searching for more affordable life cover that is in line with your personal requirements, then start your free online quote comparison of Australia's leading insurers and choose a policy that offers you the most value for money.

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Ask an Expert?


  • Sherry Eunice |

    I have a $50,000 term life policy on my husband. I recently discovered what the insurance agent sold me was not what they had promised. So, I stopped auto payments and now they say if I pay past premium they will continue the policy with no other medical exam.

    I had this policy for a little over 4 years, paid over $4,400 during this time, can I get my money back? Because the agent said my payments would never go up and that’s the highest amount I could get based on my income. I now know that in 7 years my monthly premium does go up and eventually the annual amount paid will exceed my annual income, is this legal? Help.

      Anneke Van Aswegen |

      Hi Sherry,
      I’m a bit confused, as I’m sure you must be too. You mention you have a term policy on your husband, but that the cover you got was limited because of your income. This sounds a bit strange.

      Also, I wonder if your policy was on a level premium structure that then converts to stepped premiums. Please give us a call on 1300 743 254 so a specialist can help you find clarity and answer all your questions and concerns.

      Usually, you won’t get a refund for premiums paid on a policy that you cancelled or that has lapsed (cancelled due to non-payment). However, please confirm this with our consultants as your particular situation might require investigation.

  • Inhwan song |

    Dear sir
    I had life insurance from 2006 and paid until 2016 May each month.
    But Bussiness has gotten worse and I have not been able to pay my premiums since June 2016.
    If I continue paying again from this month, will my policy continue and benefits still be available?

    Please advice me.

      Anneke Van Aswegen |

      Hi Inhwan.
      Generally, if you do not pay your premiums in full within a certain amount of time (usually 60 days depending on the insurer), your policy will lapse. This means your insurance is cancelled due to non-payment and cover will cease.

      Because so many months have based, you’ll usually need to purchase a new policy.

  • Bagavathi perumal |

    Hi. My husband took out a life policy on me. Now we are going through a divorce. I don’t want it to lapse as I took over the payments. We both consent that if it’s possible, to give me ownership of the policy. Is this possible?

      Anneke Van Aswegen |

      Hi Bagavathi,

      Generally, yes it is possible to transfer ownership on a life insurance policy. Usually, the current owner, your ex-husband, will need to complete a memorandum of the transfer in which he nominates you as the new policy owner. He’ll need to contact the insurer to get these forms. If you have any questions or concerns regarding this process, please call us on 1300 743 254.

  • Nadie W |

    I have had a life insurance policy with met life since 1997, term life USAA since 2003, another policy since 2003 with my state job, which I will retire from in 2 years. Which one do I keep?

      Anneke Van Aswegen |

      Hi Nadie,

      Because I’m not aware of the type or cover amount of your policies or you’re personal requirements, for example, do you have financial dependents, I cannot tell you which policy to keep. Please give us a call on 1300 743 254 and a specialist will help you with your decision.

  • Susanfalvey |

    I’ve been off work. Can l get a loan from death insurance?

      Anneke Van Aswegen |

      Hi Susan. Term life insurance has no cash value component and thus loans cannot be made from it. I wish you all the best.

  • Patricia |

    Do you get a refund if you cancel your funeral payment because you cannot afford them anymore?

      Anneke Van Aswegen |

      Hello Patricia,
      Generally, neither funeral or term life insurance will refund your premiums when you cancel your policy due to financial constraints. However, annual premiums, when cancelled are generally provided with a pro-rata refund for the remainder of the year, but it is always best to check with your insurer prior to cancelling.

      Another option might to decrease your cover amount, thus making your premiums more affordable. Please give us a call on 1300 743 254 for assistance.

  • Nthabiseng |

    Can I get my money back from my policy of 1 life insurance because I am not working anymore because of my health

      Anneke Van Aswegen |

      Hi Nthabiseng.

      Term life insurance policies in Australia have no cash-back component. Thus, if you cancel your policy, you will not receive any money back. However, if you paid your premiums in advance, you might be entitled to a refund of those premiums, minus any cancellation costs incurred. Please contact your insurer directly to enquire.

  • Mr andrew Charles mcphillips |

    Hi. I missed payments on my 2 life insurance policies and as a result of a telephone conversation with a SunLife advisor, I then paid in full and brought my 2 SunLife policies up to date and had them reinstated only to discover weeks later by way of a letter from SunLife that they cancelled my policies.

    I feel this was totally unfair of SunLife to do this and I now would like a full refund of my payments on these 2 policies. I hope SunLife will respond to this. If not, I will take further action. I hope to move on from this and have my life covered by another insurance company whom I hope will be fairer when I’m paying my over 50,s policies and I can look forward to my life being covered by the new insurance company.

    I’m sorry it has come to this with SunLife, whom I trusted. Here’s hoping to hear further on this matter ASAP.
    Kind regards from Mr Andrew Charles McPhillips

      Anneke Van Aswegen |

      Hello Mr McPhillips. I’m sorry to hear about your unfortunate experience.

      Just as a precaution, you might want to first contact Sunlife as the letter they sent might have been on its way before you spoke with the adviser and thus could be dismissed.

      However, if this is not the case, please contact the insurer directly to inquire about a refund regarding the premiums you’ve recently paid in. If you’re still wanting to compare other life insurance companies, perhaps our article about life insurance for over 50s will be of some assistance.

      Best of luck.

  • Mel |

    Hi, my mum had accidental death insurance but died of a terminal illness.

    I know accidental death doesn’t cover terminal illness but just wondering if there would be a refund for all the money she paid into it?

      Anneke Van Aswegen |

      Hi Mel. I’m sorry to hear about your mom.

      Term policies do not have a cash value component, so generally, no premiums get refunded. Unless your mom paid her premiums in advance, in which case the advanced payments could be partly refunded. It’s best to contact the insurer directly.

      All the best.

  • Nicolene |

    Need to cancel my policy due to unforeseen circumstances.

      Anneke Van Aswegen |

      Hi Nicolene.

      Sorry to hear about your troubles. Please contact your insurer directly to cancel your policy. If you purchased a policy through ComparingExpert, call us on 1300 743 254 and a specialist will assist you.

      Kindly note, you also have alternatives to cancelling. Ask your insurer if you can suspend your policy for a set period (you won’t pay premiums or have cover, but can generally continue your policy after the period). Alternatively, you can also reduce your coverage amount and thus reduce your premiums.

      Best of luck.

  • Walter |

    I want to surrender my policy please, due to family matters.

      Anneke Van Aswegen |

      Hi Walter.

      We’ve looked on our system, and it doesn’t seem that you are a client of ours. Please have a look at your policy schedule and contact your insurer directly to cancel your policy. Please note that term life insurance policies in Australia have no surrender value as it does not have a cash component linked to it.

  • Thabisile mthethwa |

    I want to cancel life insurance.

      Anneke Van Aswegen |

      Hi Thabisile.

      If you’re a client of ours, please give us a call on 1300 743 254 and a specialist will assist you with your request. If you’re not a client, please contact your insurer directly to cancel your policy. Be sure to have your policy number on-hand.

  • Shawn |

    In RSA, how do I know whether I have a Term Life or Whole life cover?

      Anneke Van Aswegen |

      Hi Shawn. Generally, you’ll need to contact your insurer and request updated policy documents to find out what type of cover you have. Be sure to have your policy number ready or proof of identity.