Should I cancel term life insurance?

You can terminate your policy by following the instructions at NerdWallet's Guide to Canceling Life Insurance or by contacting your insurance provider directly.

You should generally cancel your term life insurance only if your financial dependents no longer rely on your income, your major debts like a mortgage are paid off, or you have built up enough personal savings to cover final expenses.

When to Consider Canceling

• Dependents are self-sufficient: Your children are grown, finished with school, and your partner has independent financial security.
• Debt is eliminated: You no longer carry a large mortgage, business loans, or co-signed student debt.
• Sufficient assets: Your retirement accounts and savings can easily replace your income and cover funeral costs if you pass away.
• Financial hardship: Premium payments strain your essential daily living budget, though you should first check if you can lower your coverage amount to reduce costs.

Reasons to Keep Your Policy

• Income replacement needs: Someone in your household still depends on your earnings to live.
• Nearing the end of the term: If your affordable term is almost finished, most users on Reddit's LifeInsurance Forum advise keeping the policy because the payout value often outweighs the remaining low cost.
• Health changes: If your health has declined since you bought the policy, buying a new one later will be much more expensive or difficult.