Insurance Cancellation Letter

Policy termination must be done in writing because, in literal terms, it is a contract. Hence, it is necessary that you send a written notice to your insurer. This is applicable, in particular, to car, home and life insurance.
A letter requesting the termination of an insurance policy is called an insurance cancellation letter. You are free to cancel your policy at any time during the policy period. Now, some might wonder why can't we cancel it over the phone or simply walk into the office of the insurance company and inform one of the executives to cancel it for you. To clear that doubt, one must understand that an insurance policy is a contract (remember signing the papers?) and to withdraw from the contract, a written notice of cancellation needs to be sent to the insurer. Cancellation letter sample for a home, life or a car insurance remains the same, only the body of the letter varies depending on the type of insurance.

Keep in Mind
Here are a couple of very important things that one needs to remember before writing the letter.

1. Firstly, only the policyholder reserves the right to cancel the policy which means that the policyholder is the only entity who can make a written request. The insurance policy cancellation letter must be addressed and signed by the policyholder only, or else the request will be rejected.
2. Many a time, more than one person is insured under a policy, so the question is, do any of them reserve the right to cancel the policy if need be? No, not everyone has the right to do so. Then who does in such cases? An example would make it clearer. If you and your sister are insured on the same policy and the policy is in your name, then it's you who holds the right to cancel the policy and not your sister. Secondly, you must go through the terms and conditions of your policy to determine when are you eligible to cancel the policy.

Usually, you have up to 14 days from the policy effective date to cancel without penalty.

Writing an Insurance Cancellation Letter
Given below are the points to remember when writing an insurance cancellation request letter.

• Call the insurer to confirm the address where you need to mail the letter and double check the policy number.
• Inquire if you are entitled for a refund or if there is any balance that you owe on the policy, based on the cancellation date. For any unused premiums that you already paid for, request a refund and if you owe a balance on the account, then enclose a check with the letter (mention the amount in the letter as well).
• Begin your letter with the date, address of the company and the policy account number.
• Use polite but firm language to notify your company of your decision to cancel the policy.
• Request a correspondence from the company confirming that the cancellation is accepted and has been put into effect.
• The insurer is no longer authorized to charge your bank or credit card for monthly premiums after the expiration date -- this must be stated in the letter.

Cancellation Letter Template
You'll now see how simple writing this letter is. Given below is a template which could be used for any sort of policy cancellation.

Date

Name of the Dept. Head/Cancellation Dept.
Name of Insurance Company
Company's Mailing Address
City, State, Zip Code

To,
Name of the Person/Whom it May Concern

Subject: Cancellation of Insurance (Policy No.)

Mention that you are making a request to cancel the policy with effect from (date). Request for a confirmation of cancellation. Ask for a refund of unused portion of the policy (if any). State that the insurer must stop charging the bank for any further payments.

Thank the insurer for considering the request.

Sincerely,

(Your Signature)

(Your Full Name)
(Your Mailing Address)
(City, State, Zip Code)
Cancellation Letter Sample
Given below is a letter sample wherein a specific life insurance policy is being canceled.

November 27, 2012

Cancellation Department
Alliance Insurance Inc.,
1145 Vermont Avenue,
New Orleans, LA 70152

To,
Peter Mason

Subject: Cancellation of Life Insurance Policy (Policy Number: 75892735)

This is to inform you of my decision to cancel my life insurance policy with effect from December 30, 2012. I would appreciate if you could send me a written confirmation within 30 days, confirming that the cancellation has been accepted and put into effect. I also request you to refund the unused portion of my policy premium and stop charging my bank account for payments of monthly premiums.

Thank you and I hope you will consider this request and put it into effect as soon as possible.

Sincerely,

(Signature)

Steve Watson
114 Salisbury Avenue,
Endicott,
Washington, WA 99125
Just make sure you use the letter etiquette as this is strictly a formal letter. You could use the aforementioned format and sample as a general format and alter the body of content if required, depending on the information you'd like to give and take from the company. With such a simplified format, you shouldn't find yourself wasting or spending much time on writing an insurance cancellation letter.

Making a cancellation request in writing will always put you on the safe side. This is because you would be having hard copies containing the cancellation details along with the requested cancellation date.