• 06
  Apr
  2010

• Cancelling Term Life Insurance

  
  Filed Under: Blogging
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Samuel King, an information technology expert, is on assignment in the Netherlands. Since the initial period of the posting was five years, King applied for and purchased term life insurance from the IC+ Term Life Insurance plan. Now, though, his posting has been cut short by a couple of years.

What are his options? Can Samuel recover any amount of the premium paid? His plan, according to the find print, ceases to cover him once he returns to the United States. As a matter of fact, the IC+ Term Life Insurance plan offers a refund when the member requests cancellation of the policy.

The terms of the cancellation are as follows: A member can request, in writing, cancellation of his/her term life insurance plan 60 days in advance. The underwriters of the plan calculate the prorated Short Rate Earned Premium at the time of the cancellation. If the plan holder has paid more than the calculated Short Rate Earned Premium, then the difference is refunded to the plan holder.

So, Samuel does have recourse to some refund if he has paid an extra premium. However, the final decision rests with the underwriters. Remember, though, that term life insurance premiums are not as high as whole life insurance premiums, and the prorated refund may not be very high.