If I terminate my life insurance policy, does the insurer have to refund the payments I have already contributed?

Question Details: I wish to terminate my life insurance policy but was advised by the insurer that what I have contributed to the policy will not be paid back to me. Is this acceptable?

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Answers by Lawyers

Community Law Wellington & Hutt Valley

The answer to any insurance question will depend on the exact words of your policy.

However, usually an insurer is entitled to keep any payments made towards a policy if the policy is cancelled.

Under most policies what you pay for is the right to collect money or cover under the policy if something happens during the period you are insured. But this will depend on what type of life insurance policy you have. Some policies have saving components attached to them, but they are not very common and you will need to check your policy wording to see what type you have. If you have a broker, they will be able to explain the details of your policy to you.

If, after reading your policy, you still think that the insurance company has it wrong, you can make a formal complaint to the insurer. All insurers are required to have internal complaint procedures. Ask your insurer about their process and which dispute resolution scheme they belong to.

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