When should you cancel your term life insurance policy?


Editorial team Published on

You can evaluate your specific situation using guidance from Fidelity Life to determine if canceling your term life insurance makes financial sense.

When to Cancel Term Life Insurance

  • No dependents remain: Your children are grown, independent, or no one relies on your income for daily living expenses.
  • Debt is paid off: Major financial obligations, like your mortgage or large loans, are fully covered by your savings or assets.
  • You are self-insured: Your retirement funds, investments, and personal savings are large enough to handle final expenses and support a surviving partner.
  • The term is ending: Your policy is about to expire and your long-term financial responsibilities have already been met.

Alternatives to Consider First

  • Lower the death benefit: Reduce your coverage amount to lower your monthly premium if money is tight.
  • Drop optional riders: Remove extra add-ons to decrease the cost without losing the core death benefit.
  • Convert the policy: Switch to a permanent policy if you developed health issues and still need lifetime coverage.