Cancel life insurance in the event of an existing bank assignment
There are many reasons to terminate life insurance. Sometimes the monthly premiums are simply too high compared to other offers. If you want to terminate your existing insurance but have assigned it to the bank for security, you are not entirely independent in your decision.
How life insurance gets to the bank
- Life insurance is only of interest to your bank if you also have one financing agreed there. Then the insurance taken as security. You can distinguish two different types.
- In the case of real estate financing, the bank does not necessarily need additional security for the loan. She already has the house for that. In such a case, it is often a matter of hedging against the risk of default if something happens to you or any other borrower. If the income is lost and this is to be expected in the event of death, term life insurance applies.
- Such a death cover, which you assign to your bank, can usually be canceled quite easily. This applies at least if you are only interested in taking out cheaper insurance and assigning it to the bank instead.
- It becomes more difficult if you want to terminate a capital life insurance policy in which a considerable surrender value has already accumulated. If this is used to secure a loan, the bank will have a hard time approving the dissolution.
Dissolving and replacing the fuse
- Before you even cancel your life insurance, speak to your bank first. They will find out about your plan anyway, as the insurance company will not initiate anything without the consent of the bank.
- If you want to replace term life insurance, agree with your clerk to take out a new insurance of your choice. The best thing to do is to present him with a concrete offer and to ensure the assignment here as well. If the amount insured is correct, it will hardly put any obstacles in your way.
- In the case of endowment insurance, it is even more important that you contact your clerk. On this occasion, he can immediately check the amount at all for the current one credit collateral is still required. The surrender value may already be sufficient to redeem the loan including the early repayment penalty.
- If the credit history has not been disturbed so far, it is possible that the bank will opt for a replacement with a Risk insurance and otherwise the surrender value of the previous insurance as a special repayment on the Credit.
- Always negotiate in a friendly, but persistent and self-confident manner. Of course, the bank just wants to leave everything as it is if it has worked well so far. On the other hand, you don't want handouts either, because you end up paying a lot of money for the amount borrowed. You are a customer and not a supplicant.
Put life insurance on hold - you should bear this in mind
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It can be worthwhile in many cases if you have an existing one Life insurance dissolve.
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