What do I lose if I cancel my funeral insurance?

Question

José Manuel Alburquerque · Accepted Answer

You lose the cover and, normally, everything you have paid so far, because in most funeral insurance policies the premiums pay for each year's protection and do not build up savings that are paid back. If you want to take it out again later, you will pay more because of your age, you may not be accepted beyond a certain age and waiting periods (“períodos de carencia”) will apply again. The insurer, on the other hand, cannot refuse to renew your policy. If you decide to cancel, give notice in writing at least one month before the renewal date, because if you give notice later the policy renews for another year. What you lose Cover for the funeral service from the date of cancellation. The premiums paid. If your policy has a level premium, which does not rise with age, you also lose the extra you paid in the early years so that the premium would not go up later. Only some single-premium or level-premium policies give you a surrender value, provided they expressly say so. Your years as a policyholder. If you take out a policy again, the premium will be the one for your age at that time and waiting periods may apply. Before you cancel Compare what you still have to pay, given your age, with what a funeral service costs today where you live. Ask about alternatives, such as reducing the sum insured, changing the type of policy or removing cover you do not need. If you have life insurance, consider whether the sum insured would be enough to pay for the funeral. Remember that the insurer must notify you of any premium increase at least two months before the renewal date. That gives you time to decide and to give the one month's notice required by law. If you have two funeral insurance policies If you have two funeral insurance policies with the same insurer, you can cancel one and ask for a refund of what you paid for it since they started to overlap. If they are with different companies, the one that does not provide the service will have to pay the sum insured to the heirs.