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Stop paying premium for 2 years, how to cancel the contract?

I stopped paying premiums for 2 years and now don’t want to continue. How to cancel the contract? (Thanh Minh, Hanoi)

Answer:

Life insurance is a solid financial plan that requires a long-term commitment from the participant, through the process of paying periodic premiums to maturity. If the customer has stopped paying for 2 years and does not want to continue participating in insurance, it should be based on that time.





Customers should not cancel their life insurance policy midway because it will cause large losses.  Photo: Time Now

Customers should not cancel their life insurance policy midway because it will cause large losses. Image: Time Now

Specifically, if the contract ends in the first 2 years, the customer will not receive a refund even though he has paid the premium regularly and does not change the insurance amount. If you cancel your contract after 2 years of joining, you may receive a refund, but the amount may be less than the previous fee. This is because the insurance company deducts the associated operating costs from the time the policy comes into effect.

If the customer wants to stop participating in insurance, it is necessary to withdraw all the money, so that the contract account value reaches 0 dong, the contract is invalid. This procedure is not complicated and can be done quickly.

On the contrary, if the customer has stopped paying the premium for 2 years but still wants to participate in insurance, as long as the contract account value is still positive and continues to pay the premium, the contract will still be valid. In the event that a customer’s contract expires, they may have to undergo additional medical examinations to prove their health condition to continue participating.

However, canceling an insurance policy midway through not only causes damage to the participants, but also significantly affects the insurance company. In order to both maintain a policy for a long time and protect customers at all times, insurance companies spend a lot of money, including: Initial costs, additional product exploitation, contract management , hedging, fund management, contract cancellation, partial withdrawal of contract fund value, fund conversion.

These are expenses that are excluded periodically for the duration of the contract. Usually, costs in the early years are higher than in later years. So when a customer terminates an insurance policy early, the insurance company incurs a loss.

Thus, when a life insurance contract is canceled midway, both the customer and the insurance company suffer significant losses. Participants both lose their entry fees and lose their insurance benefits. Meanwhile, the insurance company cannot recover the cost spent.

Thu Ha

Insurance consultant

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