I told my friend to cancel his life insurance cover - Here’s why
Last Update Date: 05-10-2026
Published by freefincal
Abhishek Kumar's role: Wrote this article
Abhishek Kumar wrote this guest post on why he advised a friend to stop a life cover he no longer needed, and how readers can test whether their own term plan still serves a purpose.
What Abhishek Kumar said
Is a term life insurance plan meant to be a lifelong commitment?
I do not think so. Life insurance is a temporary support, like the scaffolding around a house under construction: essential while the structure is weak, pointless once the roof is on. Its job is to replace your income for people who depend on it, during the years when your savings could not. If that financial house is already built, continuing to pay a large premium is not responsibility but paying for a safety net that now hangs just above the ground.
How can I check whether I still need my life cover?
I would run two simple tests. First, dependency: if I were no longer here, whose finances would actually be derailed? If the children are earning and the partner is provided for, the case weakens. Second, liabilities: most people buy cover to clear a home, vehicle or education loan, so if those debts are gone, the need for a large payout to settle them is gone too. Answering honestly, on paper, is more useful than the guilt that usually surrounds this question.
What does it mean to be 'self-insured'?
It is the point at which your own assets could carry the family without a cheque from an insurer. If the investments you have built would generate enough to sustain their lifestyle indefinitely, the insurer's payout has become redundant. Reaching that point is, in a sense, winning the game, and it is also the signal to review a policy you may have been paying out of habit. Where someone sits on that path depends on their own balance sheet, so I treat it as a question to work through rather than a rule.
Why do people keep paying for cover they no longer need?
Years of peace-of-mind marketing have made cancelling a policy feel almost taboo, and insurers prefer customers who let a long plan auto-pay to the end. I think the better habit is to be honest about which phase you are in, building or enjoying. If the saving, investing and debt repayment are done, I think it is reasonable to let go of protection that no longer serves a purpose and redirect that premium towards living, ideally while you are healthy enough to enjoy it. I would cancel only after every test is met on paper, and never a health policy; this is about term life cover alone.
In our words, from what he said in the piece. General information, not personal advice.
More of Abhishek's views on insurance
This first-person piece argues that life cover is meant to replace income for a limited period, not to be carried for life. It sets out checks for whether a term plan is still needed: whether anyone still depends on your income, whether major loans are repaid, and whether your assets could support the family on their own.
Publisher source
I told my friend to cancel his life insurance cover - Here’s why