Definition
Cancellation (akyrosi)
Cancellation is the deliberate ending of a policy before its normal expiry, by you or the insurer. Depending on the terms and the timing, it may carry a cancellation penalty or entitle you to a refund of the unused premium. It differs from a lapse, which happens through inaction rather than a decision.
Also known as: Cancellation penalty
Cancellation is not always 'free': some policies apply a penalty or keep a minimum premium, while others refund the unused amount pro-rata. In certain cases the law grants a right of objection or withdrawal within a set period after signing — at no cost.
Before cancelling, it is worth checking two things: what the cancellation will cost, and exactly when cover stops. The gap between cancelling one policy and a new one starting is a period with no protection.
In your own policy, look for the cancellation terms — the notice period, any penalty, and how premium is refunded. If you are thinking of cancelling, first ask your insurer or advisor about the cost and when cover stops — and make sure you are not left without protection.
Upload your policy — free analysisFrequently asked questions
Do I get premium back if I cancel?
Often yes, pro-rata for the unused period — but some policies keep a penalty or a minimum premium. Your terms decide.
What is the difference between cancellation and lapse?
Cancellation is a decision to end the contract during its term; a lapse is the end without renewal, usually through inaction. Both leave you without cover.
Related
Educational content, not insurance advice. PolicyWallet explains what the term means and helps you find it in your own document — it does not assert what your policy covers.