What Happens When You Cancel A Life Insurance Policy? 
When you cancel a life insurance policy , you no longer have life insurance . If you have a permanent policy and cancel the policy during the first years of the policy , a surrender charge will be deducted from the cash value you receive , and you most likely will not receive any cash value at all . However , you will not owe money to pay the surrender charge . Term life insurance does not have any surrender charges because there is no cash value . 