If you’re considering canceling your life insurance coverage, you need to take a moment to weigh all the advantages it has to offer. You could assume that doing so would raise your discretionary income and save the premium outflow. However, you are ignoring the many benefits of having a life insurance policy. The money required for a life insurance policy is greatly outweighed by the protection it offers.

Can I, therefore, cancel my life insurance policy?

You certainly can.

But the first thing you should consider is, “What will I lose?” Long-term danger might arise from missing out on life insurance and financial protection, even if policy cancellation is permitted and feasible.

Arguments in favor of keeping your life insurance coverage in place

Future security of the family:
There is no justification for canceling a life insurance policy if your goal is to safeguard your family and ensure their financial stability following your passing.Your family depends on you to provide their requirements, including your parents, spouse, kids, and siblings. Therefore, should you be absent, they would lose their financial stability, which would leave them fighting to make ends meet. If you do not make plans for your family’s future, they may have to make sacrifices in terms of their level of life and drastically reduce their spending.

You may offer your loved ones the much-needed financial security with the guaranteed1 benefits of a life insurance policy. Your salary may be replaced by the insurance payout, keeping the family’s finances constant. A life insurance policy may serve as a substitute for income in the event of your parents’ passing, your children’s marriage, your spouse’s retirement requirements, or even just regular household bills. You will, however, deny your family these benefits if you terminate your life insurance policy before its expiration date.

• Value loss:
  The insurance company views a mid-term policy cancellation that occurs before all outstanding payments are made as a nullity. Therefore, the answer to the question of whether you may receive your money back while canceling your life insurance plan depends on the specific kind of coverage. With a term insurance policy, there is no cash value and you will not get a refund of all of your previous premium payments.
  Nonetheless, there are situations when the insurance companies let you pay a surrender price if you have certain plans, such as whole life insurance, money-back policies, endowments, etc. Even in this scenario, the surrender price is often rather substantial, and you lose out on the increase in cash value. If the surrender fee is substantial, your main reason for canceling the insurance could be defeated.
• No advantage to taxes:
  For life insurance policies, the Income Tax Act of 1961 provides tax exemptions on both the premiums paid and the maturity amount. However, you forfeit any premium payments and your life insurance expires if you terminate your policy before it matures. You are thus no longer qualified to file any applications for tax exemptions. Should you choose to abandon your insurance plan within three months after making a tax exemption, the deduction will become taxable in the year the plan is relinquished.
• Loss of mental tranquility:
  Having life insurance gives you the assurance that you will always have a solid insurance plan in case things go hard. Furthermore, you may easily achieve your long-term financial objectives with a life insurance plan. In addition, you may get a loan to cover any immediate needs and maintain your life insurance as a mortgage. Moreover, many riders2 are provided by insurance plans to guarantee you get the most protection against unforeseen circumstances. However, you rob yourself and your loved ones of this protection when you cancel the insurance.
• A brand-new cover costs a lot of money.
  You lose the insurance coverage when you give up your current plan. This implies that, due to factors like rising insurance costs, inflation, advancing age, etc., you might end up paying a larger premium than you do now when you get a life insurance policy in the future. Additionally, you would have to go through the complete medical examination procedure. According to the strategy.

Obtain reasonably priced life insurance policies.

Tata AIA Life is aware of your financial limitations and your desire to provide your family stability. You may simply protect your family’s future by selecting one of our affordable term life insurance products.
Our term plans come with special features and provide you complete control over selecting an affordable level of coverage and a premium payment schedule that works with your budget. Therefore, you should think about getting an inexpensive protection plan from life insurance rather than canceling your policy and leaving your family susceptible to unforeseen events in the future. Be prudent, consider all options, and avoid making hasty decisions.