Is it worth it?? Policy cancellation and surrender prior to contract maturity

Many who bought life insurance policy have some urgency forcing them to surrender. One of the reasons could be the lack of understandings on policy conditions or some financial inconvenience. However, are you aware that a policy surrender prior to contract maturity has more disadvantages than you think?

1. The surrender value is lower than the paid premium compared to value gained upon contract maturity. 
2. The premium for new policies might be higher because, the older you gets, the greater health risks. 
3. Buying a new policy has some risk of rejection or coverage exclusions due to changed health conditions.

However, if it is really unavoidable, Muang Thai Life Assurance can offer you some solutions.

The right for free look period

Free Look Period is the right to cancel life insurance policy within certain period as specified in the policy conditions which counts from the date the insured has received the policy book. The paid premium will be returned after deducting with the Company’s expense of 500 Baht per policy book and the actual cost of medical checkup (if any).  If you request to cancel or surrender a policy when it is already past the specified period, regardless of reasons, you may receive no money or an amount less than the premium paid.

How to exercise the right to cancel a policy during Free Look Period

Prepare all these required documents

1. Form of intent for claiming policy rights (insurance contract cancellation (Free Look))
2. Copy of identification card (certified true copy)
3. Original insurance policy book (in case of loss, police record is required.)

Download the form of intent for claiming policy rights (insurance contract cancellation (Free Look)), click

Remarks:

1. In case you would like to receive the money via bank transfers, please attach a copy of bank book of savings account or current account with certified true copy as additional evidence.
2. You must never make claims under such insurance policy.
3. In the event that the insured does not make the transaction by himself/herself, the power of attorney and a copy of the insured’s and the authorized person’s identification card certified true copy are required.

What to do when you cannot afford to pay the premium??

Premium might be a burden for policyholders inevitably and could be a reason leading to the decision to surrender a policy. That is why many have decided to stop paying the premium or cancel the policy. But, do you know those are not the best solutions? There is a way to maintain the policy, which is, conversion into a reduced paid-up policy and extended term insurance policy.  

Conversion into reduced paid-up policy “reduce sum insured but keep the same coverage period”

If you no longer want to pay for insurance premiums but want the coverage.  The coverage will be reduced in accordance with the reduced paid-up value as specified in the policy value schedule. 

Remarks:

1. In case that the insured is alive upon the contract maturity, the Company will pay the maturity benefits in accordance with the reduced paid-up value stated in the policy. 
2. In case the insured passes away during the contract period, the Company will pay the benefits to beneficiaries in accordance with the reduced paid-up value stated in the policy.
3. The sum insured will be reduced which is equivalent to reduced paid-up value as stated in the policy book.
4. The coverage period is in accordance with the original contract.
5. In case of outstanding debt under the policy, the Company will deduct it from policy surrender value before calculation for the change in policy status further.

Conversion into extended term insurance “same sum insured but change coverage period”

If you no longer want to pay for the insurance premium but would like to receive the coverage in accordance with the original sum insured, the coverage period of the contract, therefore, would be changed with the option to extend the coverage period as stated in the policy value schedule. 

Remarks:

1. Sum insured maintains the same; however, if there is policy debt, the sum insured will be deducted.
2. In case the insured is alive upon the contract maturity which was extended, the Company will not make payment of benefits. However, if there is some remaining cash value, the Company will pay the maturity benefits as stated in the policy value schedule (if any).
3. In case the insured passes away during certain extended period, the Company will pay the sum insured to beneficiaries.
4. The coverage period is in accordance with the period of policy conversion into extended terms as stated in the policy.
5. In case of outstanding debt under the policy, the Company will deduct it from policy surrender value before calculation for the change in policy status further.

How to convert into reduced paid-up policy and extended term insurance policy

Prepare all these required documents

1. Form of intent for claiming policy rights (convert into extended term insurance policy/reduced paid-up policy)
2. Copy of identification card (certified true copy)

Remark:
In the event that the insured does not make the transaction by himself/herself, the power of attorney and a copy of the insured’s and the authorized person’s identification card certified true copy are required.

Download form of intent for claiming policy rights (convert into extended term insurance policy/reduced paid-up policy), click

Document submission

Customer Service Centers nationwide, or mail them to

Muang Thai Life Assurance Public Company Limited 
250 Rachadaphisek Rd., Huaykwang District, Bangkok 10310

Things to consider about a policy surrender??

As mentioned earlier, if you surrender your policy before contract maturity, there may be some subsequent disadvantages. However, if it is unavoidable, Muang Thai Life Assurance would like you to consider and study it thoroughly. If the problem is premium payment, there is still some solution for that. 

Let’s start with understanding “a policy surrender,” what does it mean?? 

A policy surrender is the policy cancellation in exchange for cash (surrender value) from life insurance companies with the amount as stated in the policy value schedule and thus the contract ends. A policy surrender is feasible when there is some cash value, which normally occurs in year 2 or 3 onwards. 

Remark: A policy surrender will lead to the termination of coverage, which means the termination of the coverage of riders attached to the policy as well.

How to surrender a policy

Prepare all these required documents

1. Form of intent for claiming policy rights (a policy surrender)
2. Copy of identification card (certified true copy)
3. Original insurance policy book (in case of loss, policy report is required.)

Download form of intent for claiming policy rights (a policy surrender), click

Remarks:
1.In case the insured would like to receive the money via a bank transfer, please attach a copy of bank book of savings account or current account with certified true copy as additional evidence.
2.In the event that the insured does not make the transaction by himself/herself, the power of attorney and a copy of the insured’s and the authorized person’s identification card certified true copy are required.

Know it before surrender: In case of housing loan protection policy/business loan protection policy, the Company will have to check outstanding loan balance with banks before paying any surrender value. 

Document submission

At Customer Service Centers nationwide, or mail them to Muang Thai Life Assurance Public Company Limited 
250 Rachadaphisek Rd., Huaykwang District, Bangkok 10310.

Conditions are as specified by Muang Thai Life Assurance PCL.