Should I Cancel My Life Insurance? Read This Before You Do

10-Second Summary: You can cancel life insurance at any time. But if you cancel and later need cover again, your health will be reassessed and the price may be higher or cover may not be available at all. Never cancel until you understand the consequences.

Before You Cancel, Ask Yourself One Question

If you applied for life insurance again today, would you still qualify at the same price?

That is the real question.

When you cancel a policy, you are not pausing it.

You are ending the contract, so if you ever want cover again, you’ll have to start from scratch.

That means new medical questions.
You are older.
Your health may have changed.

And the new insurer will assess you based on today, not on who you were when you first took out the policy.

When Cancelling Might Make Sense

Cancelling can make sense if:

• Your children are financially independent
• Your mortgage and other debts are cleared
• Your spouse would cope comfortably without your income
• You have no inheritance tax exposure

If no one depends on your income and there are no debts to clear, life insurance may no longer be necessary.

But that decision should follow a review, not a reaction.

When Cancelling Is Usually a Mistake

If anyone depends on your income, cancelling life insurance creates risk.

If you have a mortgage or other debt, cancelling passes that burden to your family.

If you are cancelling because premiums feel expensive, it is often better to review the amount of cover rather than scrap it entirely.

Reducing cover is very different from removing it.

Switching Your Mortgage? Do Not Cancel Your Mortgage Protection

This catches people every year.

If you are switching your mortgage to a new bank, do not cancel your mortgage protection policy unless you have been specifically advised to do so.

Most mortgage protection policies arranged through a broker or directly with an insurer can be reassigned to a new lender (assuming the cover and term on the existing policy will cover the new mortgage)

• Same cover.
• Same premium.
• No new medical questions.

If you cancel, you will have to start over.

That means:

• New health questions
• Higher premiums because you are older
• Possible exclusions

Or in some cases, no cover at all

If you cannot obtain mortgage protection, you may not be able to switch your mortgage.

The only time a new policy is needed is where the policy is a bank block policy tied to the lender.

Even then, the rule is simple:

Never cancel an existing policy until a replacement has been issued and accepted.

What Happens If You Cancel and Change Your Mind?

Once you cancel properly in writing, the policy cannot simply be turned back on.

It’s better to cancel the direct debit because that gives you up to 90 days to put the policy back in force (if you change your mind)

Do You Get Money Back If You Cancel?

Term life insurance only pays out if you die during the policy term.

If you cancel, the insurer doesn’t refund the premiums you have paid.

The only exception is cancelling a new policy within the 30-day cooling-off period.

Outside of that, premiums are not refunded.

If You Are Cancelling Because of Cost

If cost is the issue, speak to someone before cancelling.

There may be options to reduce the term or the amount of cover to lower the premium.

Restructuring can be a better option than cancelling.

Once cancelled, your options disappear.

What To Do Next

If you are about to cancel your life insurance or mortgage protection, pause first.

A short review can confirm whether cancelling is sensible or whether there is a safer alternative.

Complete the short financial questionnaire below, and I will review your position before anything is cancelled.

Review Before Cancelling

Editor’s note: Originally published in 2014. Fully updated in 2026 to reflect current insurer rules and practical risks around cancelling cover.