• Cancelling Life Insurance Policy in Philippines

    Having a life insurance is one of the most sensible investments we make in our lifetime and it goes without saying. It has a dual benefit of paying a lump sum to our dependents in case of an unforeseen event and also doubles up as an investment option, disbursing the accumulated value if the insured member survives the policy term. Like any other country with a stable and sustainable economy and a strong banking system, we have a plethora of life insurance options to choose from based on the intrinsic needs.

    There has been a tectonic shift in the way we buy life insurance in the country over the last one decade. Contained paperwork, faster processing time, increased transparency, variety in the products offered are some of the changes that have evolved, making steady progress. Owing to easy access coupled with pleasing benefits, Filipinos have been taking life insurance more seriously than ever before. The Insurance Commission, a regulatory agency under the government has been doing its bit to regulate and promote life insurance in the country.

    While having life insurance is great, there are situations where the insured member contemplates on returning the policy by cancelling the contract for a plethora of reasons. What you should be aware as an educated customer is the bare fact that you can cancel and seek a refund of the full premium paid within 15 days from the date of issuing the policy. Let's explore further in this regard.

    Common Reasons for Cancelling Life Insurance Policy

    The reason for cancelling and seeking a refund are many. Let's list out some of the most reasons for doing so.

    Unhappy With the Terms & Conditions

    Perhaps, the most common reason to annul the policy. This reason is quoted when the policyholder realizes his disagreement or dissatisfaction with specific conditions after the policy has been issued. Since, paying premiums is a long term commitment, he/she feels the need to ask for refund than continuing with the cover, presuming it to be burdensome. Some clauses can be the deal breaker for the insured member, provoking them to do so.

    Hidden Fees & Charges

    Yet another commonly occurring cause for initiating a cancellation. The insured member may feel cheated since the schedule of certain fees and charges was not communicated upfront or the agent misrepresented the implication of specific fees. In such cases, a cancellation is inevitable since there is loss of trust. The costs and affordability of the policy also becomes a question.

    Found A Better Deal

    Many a times, the insured member initiates a cancellation since they’ve found a better deal through another insurer. The benefits offered by a different policy in the same segment can lure the member into signing up for it. Since life insurance is a long term commitment, the need for a better policy is realized during the early days of the policy. For example, the returns offered by VUL (Variable Universal Life) for insurer B over the last couple of years can be higher than the same policy type you availed from a cover availed from insurer B.

    High Premium Amount

    Who does not want to save money? Revoking an existing insurance policy also happens due to the high premium value. The member may have signed up for it in a hurry and therefore feels the need to seek a refund if the premium value is going to burden the budget of the holder in the longer run. You can also seek alternatives by consulting the customer service wing over the phone or visit the nearest branch.

    Incorrect Information

    Sometimes, incorrect policy or personal information also triggers a request for annulling the life insurance cover since it can be irritating to have wrong information on records.

    How to Stay Away From Cancelling It

    If you do not make well informed decisions in this regard, you may actually end up making a wrong decision. Here are some tips to deal with such situations.

    • Read the fine print thoroughly after you receive the policy document. It helps us in understanding the terms better.
    • If you disagree with a specific clause/quantum of benefits, contact the agent/customer service immediately for further advice.
    • Try to scout for further information on the policy benefits from people who have availed a similar cover. If not for family and friends, you can get relevant information by posting relating questions on public forums (online) and seek real genuine answers.
    • If the heartburn is due to the high premium amount paid, speak to the company directly to inquire if there can be a better deal.


    Before approaching the insurer to revoke the insurance, keep the following points in mind.

    • Preserve the original policy document
    • Ensure the request is initiated within the “Free Look Up” or “Cooling Off” period. Details pertaining to this will be provided in the first few pages of the fine print.
    • If you’re sending an email to the insurance company, make sure you do so from the id registered as it may result in unnecessary delay.

    Cancellation Procedure Paperwork- What You Should Know

    The Free Look Up period is your legal right and the insurance company is obligated to accept your request for cancellation. These days, most of the companies accept request for annulling by an e mail. If they require a letter, draft it in the required format and make a copy before posting it. Ensure you either send it by registered post or a courier service by which you can track the whereabouts of the letter.

    Once the letter has been received, the insurance company will initiate a request in this regard and confirm via SMS, email or both. In some cases, you will be required to send the original policy document back to them. After successful validation, they will annul the policy and issue a closure letter in this regard.

    The premium paid will be refunded through the relevant channel, depending on how you paid. If the payment was made by cash, a check will be issued and if you paid by a debit card, it will be refunded to the bank account. Make sure to follow up at regular intervals if you do not hear from the insurer. Remember, it's your responsibility to ensure conclusion. If there is a dispute and not going your way, look out for escalation channels within the system.

    Tip: If you bought the cover through an agent, it's wise to directly submit the cancellation request to the company to cut out middlemen in this process.

    It's always wise to have a life insurance. Understanding life insurance benefits helps in long term.

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