Beware The Potential False Economy Of Cancelling Your Protection Insurance During The Cost-Of-Living Crisis

[Liz Seyi]

Here at QuoteLifeCover, we are well aware of many of the pressures that people up and down the UK are feeling at the moment, particularly in relation to their finances. In 2022, many of us have found that our incomes aren‘t stretching as far as they used to, with this situation forcing great numbers of people to make hard choices about how they spend their money.
At times when people need to cut back on their expenditure, the received wisdom is that it is best to first sacrifice those things that aren‘t so important, or that aren‘t currently being used.
So, if you have a protection insurance policy in place right now - something like income protection, critical illness cover, or a life insurance policy - you might be asking yourself, “do I really need this? At least right now?”
The problem with cancelling a policy and reinstating it later
A lot of people who do have protection insurance like the above might be tempted to think that if their policy isn‘t currently paying out - for example, providing monthly tax-free payments in the case of an income protection policy - it isn‘t effectively doing anything for them, and can therefore be sacrificed.
You might even think, “yes, it‘s a risk to ditch my protection insurance policy, but in my current financial situation, I have to do it. I can always just reinstate the policy later when I‘m in a better position.”
That‘s because, in order to reinstate the policy later, you would need to buy a new policy afresh. By then, you will be older (which is always a sure thing for bumping up new protection insurance premiums), and you might have health concerns that you didn‘t have at the time you took out your previous policy.
You may find, then, that more expensive cover effectively wipes out any ‘savings‘ you had made from cancelling the last policy you had. That makes it very likely that cancelling your protection insurance will turn out to be a false economy, even if you only wait a few months before buying a new policy.
We can help ensure you benefit from the perfect policy
As well as the above, of course, there‘s simply the fact that cancelling your protection insurance means you will no longer have protection. And there are all too many instances from down the years of people deciding they could “take the risk” of doing without protection insurance, only for the worst to then happen. It could be tragic and devastating, and we wouldn‘t want it to happen to you.
Let‘s imagine, for instance, that it‘s a combined critical illness and life insurance policy you‘re thinking of cancelling amid the cost-of-living crisis.
If you took out the policy in the first place to help ensure your household would be financially protected in the event of you dying or suffering from a serious health condition such as a stroke or cancer, those risks won‘t go away during even a short period without the insurance. The potential consequences just don‘t bear thinking about.
Naturally, no one person‘s circumstances will be identical to the next person‘s, and we don‘t know your particular situation. Nonetheless, we would urge you to think very carefully about any decision you make to cancel protection insurance for cost reasons during this time. You won‘t want to be haunted by a decision that you later severely regret.
Would you like to benefit right now from the advice that could help you secure the best income protection, critical illness, or life insurance policy for your needs? If so, you are welcome to call our completely free advice and quotation service today, on 0800 316 6917, with no obligation to buy.