Reasons Why You Shouldn’t Cancel Your Life Insurance Policy

​If the reason for canceling your life insurance policy because it is a waste of money? Generally, it may be because you have a hard time paying monthly insurance premiums. Whatever the reason, don’t cancel your insurance policy without doing a little study on it. Listed below are some of the reasons why you should not cancel your life insurance policy.

To take care of your family’s future financial needs.
Every dependent of a breadwinner in the family is hoping to be continually supported even after the breadwinner’s death. In that, the insurance benefits will come to their rescue. A loss of income of a breadwinner can put the whole family in a predicament and can compromise on various financial constraints. Life insurance is a financial service designed to protect and bring in financial assistance when a breadwinner becomes incapacitated to work or upon his untimely death. Canceling a life insurance policy is not a good idea especially if all of your children are still depending on you.

Surrender charges can harm your finances.
When you are planning to cut your monthly expenses, your insurance premium may be the first one to be affected. If you want to cancel your insurance with a hope to get a new insurance plan later, you’ll lose big money on that idea. When you get the same policy in the future, you will have to pay much bigger than the previous with the same coverage. After you have canceled your insurance, and if a disease is detected, you will get nothing.

To save some income tax money.
Under Section 80C of the Income Tax Act of 1961, it qualifies you a tax deduction for insurance premiums you pay for the year. If you cancel the policy, it merely means you are no longer eligible for tax deduction and no more insurance coverage. By withdrawing the plan, you will lose all the benefits.
When you stop the payment of monthly premium mid-way, you’ll not get a good tax return.

Canceling life insurance policies will make you lose money out of the cash value of the plan due to surrender charges and tax. So it’s not practical to cancel your insurance policy?

At Insurance Marketplace, Inc., we do our best in making sure that our clients are well-protected with affordable and comprehensive policies. We make sure to go the extra mile to help you with your needs. To learn more about how we can help you, please contact our agency at (541) 779-0177 or Click Here to request a free quote.