What was the key reason you got life insurance in the first place? Your family well-being, right?
You want to cover them from any money problems they may face after your death. To keep it in force, you must pay the premiums on time, which you did! But, unfortunately, you happen to face some money trouble. As money becomes scarce, you need to cut the spending. The first cost that comes to mind is… insurance premiums, a cost that doesn’t bring an immediate return. It becomes too heavy to pay when your income shrinks during nasty times. Furthermore, you begin to consider that perhaps the premium money should be better utilized in servicing something more immediate in need… according to your friend.
You should shun these misdirecting ideas. If your family depends on you financially or if you have debts, it is imperative to get financially protected through a life insurance policy. Much more important is keeping it in force!
When you have serious doubts about something, reminding yourself why you invested your time and money in it in the first place is always beneficial. Does it still make sense now? Would you still commit to doing it now? Remembering the reasons may change your mind to ditch the policy.
(Note: I believe people buy insurance not out of their whims and fancies. The same is true for cancellation. The reason may be valid and out of necessity. But, there are options available to cater to the changes in the insured needs that do not require policy cancellation. We will discuss these in another article.)
Let’s move on to the primary purpose of this article. It’s a bad financial idea to cancel your life insurance policy. Why? Let’s explore.