Are you stuck with a wrong health insurance plan and want to cancel or switch the plan?
Read this article carefully as we will discuss the process of writing a health insurance cancellation letter.
In the market, you can easily find a wide range of insurance products and due to this, selecting the best one is very difficult.
Usually, we select an insurance plan on the basis of the number of family members, their age and health conditions which may change over the period of time.
You have the full right to terminate your policy prematurely and switch to a new one if you are not satisfied with the facilities offered by your current health insurance service provider or find a better deal from other companies.
However, changing insurance policy is not easy as you are bound by several hidden terms and conditions. Therefore, you need to write a proper Health Insurance Cancellation Letter to the concerned authority.
If you are not sure how to write such a cancellation letter then you are at the right place as we will discuss all the process and basics of writing such letters.
Is It Possible to Cancel the Insurance Plan Prematurely?
Yes, in most cases it is possible.
In general, customers are not aware of their rights and have a careless attitude towards the cancellation of insurance plans.
Many people even hesitate to cancel their incompetent insurance policies and keep on paying premiums until maturity as they don’t have proper knowledge of the cancellation procedures.
Even they think that there is no way to terminate the policy once it is initiated. But in reality, it is always possible to terminate the plan any time you want.
If an insurance agent or company advises you that premature termination is not possible and it may lead you to unpleasant consequences then you need to understand that – being a policyholder you have the full right to terminate your policy whenever you want and the insurance company can’t pressurize you for retaining the policy.
What Are Valid Reasons for Cancelling an Insurance Policy?
This question may arise in your mind that insurance is taken to mitigate the risk associated with life.
Any person who avails any kind of health insurance wants to secure himself and his family from any unpleasant accident or diseases. So what’s the need to cancel it?
There are some cases when it is better to call off a plan rather than continuing it.
Some common reasons are:
- If you find a better and affordable plan than your existing one which also provides a wide coverage, then you may want to switch.
- If you find that the conditions and the rate of the plan are unsatisfactory then also you can terminate the policy immediately.
- If you are moving to a different country or a remote place which is not under the area of coverage of your insurance policy.
- If you lost your job or source of income and aren’t able to pay the premium.
Apart from these, there can be other reasons due to which a policyholder can terminate the policy.
What Are the Key Points That Need to Be Addressed Before Writing a Policy Cancellation Letter?
Before initiating the termination process it is important that you check for all possibilities.
If you or someone from your family is suffering from a high-risk disease then it is essential that you consult with your insurance agent about the pre-existing disease. Most of the time you may not be covered for such pre-existing illness.
The next important point that you should look for is the terms and conditions of the insurance plan. You should check if there is any provision of cancellation in your policy or not.
In most of the policies, it is there along with some specific conditions which mention that the cancellation letter should be addressed to whom and notice period.
Here they also mention the maximum number of days required to complete the cancellation procedure. To avoid any kind of unfortunate situation, if you find any of such conditions then you must follow them.
If you do not find such conditions in the policy brochure then you can simply write an insurance cancellation letter. But before writing the letter it is important to read the policy document very carefully.
How to Write an Insurance Cancellation Letter?
This letter is quite similar to other formal letters. So, the first thing you need to keep in mind that the tone of the letter should be formal. You need to be careful about some important points which are listed below:
- In your cancellation letter, you should provide the complete details of your policy i.e. policy number, policyholder’s name and other references that are essential to track the policy.
- The purpose of your letter should be very clear. You should clearly mention that you want to terminate the existing health insurance policy immediately.
- If you have paid the advanced premium or any cash value is associated with your policy then do not forget to mention that in the letter. You can also mention the preferred mode of receiving payment i.e. through check or wire transfer in the linked bank account.
- The next point which needs to be covered is the reason why you are doing so. You can mention any legitimate reasons for terminating the insurance plan.
- The ending of the letter should be respectful and optimistic. Your letter must have appropriate salutation like- sincerely, regards, best regards etc.
- You may request for a return receipt.
- Don’t forget to check your letter for grammatical and spelling errors. You can use any grammar checking software like ProWritingAid.
- Your letter should not be too long. Usually, two or three paragraphs are sufficient to mention all the mandatory details.
- Be careful about the selection of words, if you find the current insurance policy too expensive; nevertheless avoid using a harsh tone.
Sample Health Insurance Cancellation Letter
Bharti Axa life insurance
Kind Attention: Cancellation Department
Policy Number- XXXXX
Subject: Cancellation of Policy XXXXX:
To Whomsoever It May Concern
I (Risabh Nagar) had purchased a health insurance policy (Policy Number- XXXXX) from your company in 2015. It is quite unfortunate to inform you that now I want immediate termination of my policy. The reason behind such a decision is my unstable financial situation. I lost my job two months back and since then struggling to find a stable source of income. It is getting difficult to pay the essential bills these days hence I would not be able to pay the premium of the policy from the next month onwards.
Kindly accept my request and send me a hard or soft copy of acceptance of cancellation request as soon as possible.
You can contact me anytime via mail or phone in case of any query. I hope to get a positive response from your side.
1521, Navi Mumbai
So, next time when you want to terminate any policy follow this sample to draft a perfect letter according to your needs.
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