What To Do When Your Customer Wants To Cancel A Policy

Insurance Agent
28 Jun, 2023
Author : PolicyBoss
Insurance Agent

Receiving a request from a customer to cancel an insurance plan is stressful for insurance agents or POSP (Point-of-Sale Person) agents. Insurance agents face such situations multiple times throughout their careers. And it's a time that you must handle with care and professionalism to maintain the trust and loyalty of your customers. Though the customer sent you the insurance policy cancellation request, it's not something unchangeable. As a POSP agent, you still have the chance to convince them and retain your current customer.

The PolicyBoss POSP certification makes you competent enough to keep your customers happy and reduce the instances of insurance cancellation. When customers are satisfied, they renew policies and share positive feedback on social media, attracting new businesses.

The POSP agent must follow certain strategies to convince the customer and stop the policy cancellation. Let's explore the strategies a POSP agent should adopt to prevent insurance policy cancellation.

Steps a POSP agent should take when the customer wants to cancel a policy.

Incorporate the following steps into your processes. It would help reduce cancellations and save your income from sliding down.

  • Listen to Your Customers Carefully: The first step in handling an insurance policy cancellation request is to listen to the customer's concerns. Ask them why they want to cancel the policy and take note of their reasons. Approach the conversation with empathy and understanding. Remember that the customer may be going through a difficult time and may have valid reasons for canceling the insurance policy.

    Suppose a change in asset allocation is the reason for cancellation. In such cases, understand their needs. Whether they need an increased or a reduced policy limit or the addition of new coverages to the existing one. Understanding the customer's needs helps you stop them from canceling the existing policy and going for a brand-new one from another insurer.

    Sometimes, customers cancel their policies as they are not satisfied with the service you provide. In such situations, understand the cause of their unhappiness. If there's a problem you can solve, apologize and explain how you'll fix it to prevent it from happening again. Showing your commitment to making things right may influence them to reconsider policy cancellation.

  • Explain the Consequences of Canceling the Policy: Once you have listened to the customer's concerns, it's essential to explain the consequences of canceling the insurance policy. Let the customer know if there will be any penalties or fees associated with the cancellation process. If the customer cancels a policy mid-term, explain how challenging it is to face any potential incidents without adequate insurance coverage.
  • Offer Alternative Solutions: If a customer cancels their insurance policy for financial reasons, suggest alternative solutions to maintain coverage, such as adjusting coverage or payment plans to fit their budget. If the cancellation is due to a change in circumstances, offer alternative policies to suit their needs better.
  • Provide Clear Instructions on the Cancellation Process: If the customer decides to proceed with canceling the policy, provide clear instructions on the refund and cancellation policies of the insurer. Let the customer know what steps to take while canceling the policy, such as filling out a cancellation form or providing written notice.
  • Follow up with the Customer: After the cancellation has been processed, follow up with the customer to ensure that everything went smoothly and that they are satisfied with the outcome. It's also an opportunity to ask for feedback on how you can improve your services in the future. The customer canceling an insurance policy doesn't mean they've gone forever. Keeping their trust and loyalty helps you win them back without annoyance.
  • Provide Options: Offer alternative solutions that might align better with the customer's needs. This could involve adjusting coverage, changing payment schedules, or exploring other policy options.
  • Review Policy Benefits: Reiterate the policy's benefits and how it aligns with their needs. Highlight any unique features that might make the policy valuable to them.
  • Offer Grace Period Information: If applicable, explain any grace period during which the customer can reconsider the cancellation without affecting their coverage. This provides them with additional time to think over their decision.
  • Address Concerns: Address any concerns the customer has raised, and provide solutions to resolve them. If there are legitimate issues, offer to escalate the matter within the company to find a resolution.
  • Provide Contact Information: Offer your contact information in case the customer has further questions or needs assistance. Reassure them that you're available to help even after the conversation.
  • Document the Interaction: Make sure to document the details of the conversation, including reasons for cancellation and any alternatives or solutions discussed. This information can be helpful for future reference and for improving customer service.
  • Respect Their Decision: Ultimately, if the customer is determined to cancel, respect their decision without being pushy or aggressive. Thank them for their business and express your willingness to assist them in the future.

    Remember, maintaining professionalism, empathy, and a customer-centric approach is crucial when handling policy cancellations. Your goal should be to provide value, address concerns, and ensure that the customer feels heard and respected throughout the process.

Benefits of the PolicyBoss POSP certification program.

POSP stands for Point-of-Sale Person in insurance. A POSP agent is the authorized person to sell different types of insurance policies from multiple insurers.

POSP is not just a full-time job opportunity but a commission-based business option apt for anyone who is insurance-wise career minded and wants to offer all possible insurance options from a single platform. This work-from-home opportunity offers a lot of flexibility. You can choose your own working hours, and to become a POSP agent , you just need to complete the training program and fulfill other eleigibility criteria like Class X education, 18 years of age and a valid PAN Card.

The POSP certification offered by PolicyBoss has several advantages, and a few of them are:

  • The POSP certification program from PolicyBoss allows you to learn about insurance products from industry experts.
  • PolicyBoss is associated with a wide range of insurers across categories. It allows POSP agents to sell multiple insurance products from different insurance companies and earn more.
  • A dedicated RM for end-to-end support.
  • PolicyBoss provides POSP agents with digital sales aids including a mobile app and desktop platform access for sales, customised creative and greetings and much more.
  • The PolicyBoss app's 'sync-contact' feature allows POSP agents to access leads from their own phonebook contacts.
  • Ontime commission payouts.


No doubt, handling an insurance cancellation request is a challenging situation for POSP agents. However, canceling an insurance policy is common in the insurance industry. Hence, do not take it personally or lose your confidence when you get an insurance policy cancellation request. Different customers are from different backgrounds and have different reasons for policy cancellation. But when a customer asks for insurance cancellation, as the POSP agent, you must enquire about the causes and explain the consequences of canceling the policy. If the customer hasn't changed their mind yet, provide clear instructions on the cancellation process. Building a successful insurance business requires maintaining the trust and loyalty of your customers.

PolicyBoss POSP certification offers a work-from-home insurance career opportunity. This business opportunity allows you to earn a decent income through commission while maintaining a healthy work-life balance.

Related Post