No doubt, if you will ask people around, you will found every third person has taken an insurance policy either life or health insurance. You will be shocked when you came to know that more than 60% of these policyholders are not aware with the process to cancel a policy. This is because they rarely read policy document after taking a policy.
We get relaxed after taking an insurance policy and never read the policy document. We read it only when it comes to claim against a policy. When our claim get rejected due to a specific reason, we come to know that we were misguided at the time of taking the policy. Generally, we think to cancel a policy only when it does not fulfill our requirements or its terms and conditions does not matches the terms mentioned by the broker.
As per IRDA (Insurance Regulatory and Development Authority) guidelines, each insurance company provide a grace period of 15-20 days after issuing the policy document to a policyholder. If you are not satisfied with the policy terms or benefits, you can submit an application to cancel your policy during this time. A nominal charge of Rs 50 -100 is charged for bond/stamp paper and processing fees of the application, remaining amount is credited to your bank account or a account payee cheque is issued to you.
Whenever, you have decided to cancel a policy, you need to write an application to the same branch manager where you have submitted the application form to take that policy. In this application, you need to mention why you are willing to cancel the insurance policy. Mention the reason whether, you are not satisfied with the policy benefits or you were misguided by the agent at the time of taking the policy. Then give a request to cancel the policy.
Within a week of submitting the policy cancellation request, your policy get cancelled. Insurance company will dispatch the cheque against your policy after deducting a nominal charge of stamp paper or processing fees. Remember, once you send the cancellation request for your policy, you will not be able to get any benefit that your policy provides.