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Termination flow
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Termination flow

Interactive content available

All ledger endpoints can be interacted with through interactive API Registry

What is Termination?

Termination in the context of insurance refers to the formal and intentional ending of an insurance policy before its originally agreed expiration date. This can occur for a variety of reasons, such as customer requests, non-payment of premiums, significant claims, or regulatory changes. The process of termination ensures that both the insurer and the policyholder are clear on the final details of the coverage and any financial adjustments, such as premium refunds.

Business Need for Termination

In the insurance industry, termination is an essential aspect of policy management. It enables insurers to maintain control over the policies they issue while ensuring that customers are treated fairly, especially when a policy ends before its scheduled expiration. Termination helps insurers:

  • Manage financial risk by adjusting premiums based on the coverage provided.
  • Maintain compliance with regulatory requirements regarding policy cancellation or early termination.
  • Handle customer interactions effectively, ensuring smooth transitions for customers who no longer require coverage or wish to modify their policies.

Terminating a policy correctly is crucial for customer satisfaction, proper financial management, and regulatory compliance.

There are four main termination types used in the system, each serving different business and regulatory needs. Not all of these options are always available and they depend on the product setup.

Each termination type offers flexibility to accommodate various business scenarios and ensures that policies are terminated fairly and in line with legal and financial considerations.

1. Pro-rata Termination

  • Definition: Refund is calculated proportionally based on how long the policy was active.
  • Use Case: When a customer ends a policy early and expects a fair refund.

2. Manual Termination

  • Definition: Refund amount is manually specified by the user.
  • Use Case: Special agreements, total loss claims, or corrections.

3. Full Rollback Termination

  • Definition: Entire policy is treated as if it never existed. All premiums and fees are refunded.
  • Use Case: Policy issued by mistake or client decided against buying the policy.

4. From-Installment Termination

  • Definition: Policy ends starting from the next billing period.
  • Use Case: Policyholder wants termination to align with the next installment.

Endpoint - Termination

curl -i -X POST \
  'https://ledger.docs.insly.com/_mock/apis/ledger/bundled/api/v1/ledger/policies/{policyId}/terminate' \
  -H 'Authorization: Bearer <YOUR_JWT_HERE>' \
  -H 'Content-Type: application/json' \
  -H 'X-TENANT-ID: {$inputs.tenant}' \
  -d '{
    "policy": {
      "terminationType": "full-rollback",
      "terminationReason": "Optional reason"
    },
    "financials": {
      "adminFeeSum": 0
    }
  }'
Response
application/json
{
  "event_id": "123"
}

Result of the API Call

The response will confirm whether the policy termination request has been successfully processed. A successful termination results in the policy being canceled and no longer active.

Notes

Termination Type: There are 4 termination types supported by the system, as mentioned in the flow description.

Adjustment Handling: Depending on the termination type, the system may adjust the premium for the period the policy was active.

Endpoint - Get premium after termination

Overview

This endpoint returns automatically calculated adjusted premium based on the number of unused days remaining in the coverage period

How It Works

  • terminationSum is automatically calculated by the system and is read-only.
  • terminationDate is required and determines the refund calculation period.
  • Additional fields like adminFeeSum may optionally be shown for fee adjustments.
  • No manual override of the calculated refund is allowed in this mode.
curl -i -X POST \
  'https://ledger.docs.insly.com/_mock/apis/ledger/bundled/api/v1/ledger/policies/{policyId}/terminate/premiums' \
  -H 'Authorization: Bearer <YOUR_JWT_HERE>' \
  -H 'Content-Type: application/json' \
  -H 'X-TENANT-ID: {$inputs.tenant}' \
  -d '{
    "policy": {
      "terminationDate": "2025-09-04",
      "terminationType": "pro-rata"
    }
  }'
Response
application/json
{
  "policy": {
    "terminationSum": -498.53,
    "returnAmount": -59.82
  }
}

Summary

This endpoint provides a calculated terminationSum, representing how much of the original premium remains unused at the time of termination. This is useful for displaying or validating the financial implications of a termination.

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