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Cancelling life insurance?

Hello. I have a life insurance policy through State Farm (20 year, term) and I just got a much better rate through another company (with AMBest's highest rating). How does one cancel a life insurance policy? Is it as simple as calling State Farm? Should I expect to have to pay any fees to cancel the policy?

Public Comments

1. Read your policy. Generally, there is no penalty with term insurance. You stop paying the premium and they cancel the policy.
2. You just hit on one of the best advantages of a term policy. It is like renting insurance. Once you find something better or decide you don't need it. Just quit paying. I am a firm believer in term vs whole life policies for that and other reasons. Agents love to sell whole life because they make huge $$ compared to term. I would keep shopping every year or so to make sure you have the right policy. Here is an article on the pros and cons of term life insurance: http://www.lifeinsuranceaxis.com/Term_Life_Insurance/Term_Life_Insurance_The_Pros_and_Cons.php