KÜHEYLAN HUKUK
How to Cancel Credit Insurance? Premium Refund and Insurance Imposition by the Bank. Consumer rights in life, unemployment and home insurance have been updated as of 2026 within the scope of the Regulation on the Implementation Principles of Insurance Related to Personal Loans and Article 26 of the Consumer Loan Agreements Regulation.
Documents signed when using a loan include life, unemployment or personal accident insurance policies, and a significant portion of consumers consider these to be mandatory. With the changes that come into force in 2022, credit-related insurance cannot be taken out without an express request, the bank must also offer a loan without insurance, and the appropriate policy that the consumer brings from another company must be accepted. The guide explains which insurances are actually compulsory, how to cancel the policy, how to get a premium refund uninterruptedly within the first month and on a daily basis thereafter, the fate of the insurance when the loan is closed early, and the authorities to be consulted in case of dispute.
1. Is it mandatory to have insurance when taking out a loan?
Credit-related insurance is divided into two: compulsory and voluntary. Compulsory insurances are insurances that are introduced by law and must be taken out independently of the loan: compulsory earthquake insurance (DASK) in housing loans and compulsory traffic insurance in vehicle loans are of this nature. The bank only controls the existence of these insurances (Regulation on Implementation Principles of Insurance Related to Personal Loans, briefly BKBSY, art. 5).
Life, unemployment, personal accident, motor insurance and housing package insurances are optional insurances. Credit-related insurance cannot be taken out without an explicit request given by the consumer in writing or via a permanent data recorder (Consumer Credit Agreements Regulation, briefly TKSY, art. 26/1; BKBSY, art. 13/1). The bank may offer an insured loan; However, in order to do this, he must also offer the same loan without insurance, and the two offers are shown separately in the pre-contractual information form.
Even if insurance is preferred, the choice of company belongs to the consumer. The bank must accept the policy, which is compatible with the loan amount and duration, and taken from another company, the principal of which is the lending bank, without changing the conditions of the loan. Any contract provision requiring insurance to be provided by a specific company is invalid (TKSY art. 26/3; BKBSY art. 13/1). It is also prohibited to have more than one insurance covering the same guarantee and to have insurance exceeding the loan amount (TKSY article 26/4).
2. How to Cancel the Policy and Get the Premium Refunded?
If the borrower submits to the bank, within one month from the start date of the policy mediated by the bank, another policy that is suitable for his needs, loan amount and duration and whose principal is the bank, the current policy will be canceled as of the start date and the paid premiums will be refunded without deduction within five business days from the presentation date (BKBSY art. 11/1). This method is the most effective means of replacing the policy with a high premium from the bank's own group company with a more suitable policy in the market.
In case of cancellation requests made at a later date under the same conditions, the policy is terminated by refunding the premium for the remaining period on a daily basis or by paying the separation value for cumulative products, and the payment is made within five business days. In order to terminate the policy, a more severe method cannot be imposed than the method used in establishing the policy (BKBSY art. 13/5). For example, there is no requirement to come to the branch or have a notary notice to cancel the insurance, which can be done in a few clicks via mobile banking.
3. What Happens to Insurance When the Loan is Closed Early?
In credit-related amount insurances, that is, insurances based on debt balance such as life and personal accident, the insurance contract is terminated as a rule if the loan debt is paid before maturity or the debt structure changes. Continuing the policy as it is or rearranging the coverage and duration is only possible provided that the consumer is informed at that time and his express consent is obtained (TKSY art. 26/2). Therefore, a policy that is maintained without the consumer's approval and whose premium is collected after the loan is closed is a collection that can be refunded.
The amount to be refunded in case of early closure is the portion of the paid premium corresponding to the remaining insurance period. In long-term life insurance with upfront premiums, this amount may constitute a significant part of the total loan cost. For this reason, when closing the loan, it is necessary to request the cancellation of the policy and premium refund from the bank in writing and keep the payment receipt and cancellation confirmation.
Insurance without express request TKSY art.26/1; BKBSY art.13/1 Insurance cannot be taken out; A refund of the premium collected may be requested
Offering a suitable policy from another company TKSY art.26/3; BKBSY art.13/1 The bank has to accept; loan terms cannot be changed
Policy change within the first month BKBSY art.11/1 The policy is canceled from the beginning; Premium refund within 5 business days without interruption
Cancellation after one month BKBSY art.11/1 Premium refund or separation value on a daily basis
Early closing of the loan TKSY art.26/2 As a rule, insurance terminates; Explicit consent is required to continue
Second policy with the same coverage TKSY art.26/4 Forbidden; Overpaid premium is refunded
The main function of credit life insurance is to ensure that the debt is not left to the heirs in the event of the death of the debtor. The Supreme Court finds it contrary to the rule of honesty for the bank to initiate proceedings against the heirs for the receivables within the policy limit while the policy exists, and accepts that the bank must first collect from the insurance company and that only the balance exceeding the policy limit can be requested from the heirs (3rd HD, 30.10.2024, E.2023/5398, K.2024/3379).
Insurance companies often deny compensation on the grounds that "pre-existing disease was not declared." The Regulation has imposed a time limit on this defense: in policies for which a health declaration has been received, if the company does not make a preliminary examination of the health status within one month from the beginning of the policy or does not withdraw from the contract based on the declaration obligation, it cannot subsequently claim that the declaration obligation has been deliberately violated (BKBSY art. 13/3).
1. Written application to the bank and insurance company: Cancellation and refund requests are made via permanent data recorder (e-mail, mobile application, KEP) by specifying the policy number and credit number, and the application record is kept.
2. Insurance Arbitration Commission: In case the insurance company avoids premium refund or compensation payment, application can be made if the company is a member of the commission; The decision process is significantly shorter compared to the court.
3. Consumer arbitration committee or consumer court: For claims under 186,000 TL for the year 2026, an application can be made to the consumer arbitration committee against the bank that sold the insurance during the loan process and collected the premium, and for claims above that, an application can be made to the consumer court after mandatory mediation.
4. SEDDK complaint: Practices contrary to the regulation can be reported to the Insurance and Private Pension Regulation and Supervision Agency; This method provides administrative control, but does not alone lead to a decision to return.
Y.E. used a consumer loan of 600,000 TL with a maturity of 36 months in 2025; Life and unemployment insurance boxes were checked on the loan screen and a total of 41,000 TL premium was deducted from the loan amount in advance. Y.E. He paid off the debt completely in the 14th month of the loan, but the bank refused the refund, stating that the insurance "should be waited for it to expire".
In case of early closing, credit-related amount insurance is terminated as a rule and its continuation requires separate notification and express approval (TKSY art. 26/2). A written cancellation application was made to the bank and the insurance company, and a refund of the premium for the remaining 22 months was requested on a daily basis. It was also claimed that the insurance was sold with pre-marked boxes and that the offer without insurance was not shown in the information form. The insurance company refunded the premium for the remaining period; The remaining claim regarding the claim that there was no clear demand was accepted by the consumer arbitration committee.
If I cancel the insurance, will the interest on the loan increase?
In fixed-term consumer loans, the interest rate is fixed when the contract is established and cannot be changed to the detriment of the consumer (TKSY art. 22/1). The conditions of the loan cannot be changed if a compatible policy is offered from another company. The price difference between the insured and uninsured offer must be shown in the information form before the loan is used.
How many days does it take to cancel credit insurance?
After the cancellation request reaches the bank and insurance company, the premium refund must be made within five business days. Requests for withdrawal and surrender of policies that have a delinquent basis become effective at the end of the fifth business day following the day the bank is informed (BKBSY art. 14/1).
Is home insurance mandatory for a mortgage loan?
DASK is mandatory by law. Housing package or fire insurance is optional; Even if the bank requests it as collateral, the consumer can get this policy from the company he wants. The cost of home insurance is determined not by the loan amount, but by the reconstruction cost of the house, excluding the land (BKBSY art. 10/4).
Who has to follow up on policy renewal?
Responsibility for renewal belongs to the borrower, and notification regarding the renewal period belongs to the bank. The bank must make a notification fifteen business days before the maturity date (BKBSY article 12).
Missing a one-month period: An uninterrupted refund of the entire premium by offering a policy from another company is only possible within the first month.
Not asking about insurance when closing the loan: The premium of the policy maintained without approval after closing may continue to be collected for years.
Making the cancellation verbally: It is difficult to prove the instructions given over the phone; The request must be made in writing or on a permanent data recorder.
Completing the health declaration carelessly: Untrue declaration may lead to denial of compensation in case of death and the debt to be left to the heirs.
Making a direct payment as an heir: In the death of the debtor, the policy should be checked first and the bank should be asked in writing to apply to the insurance company.
Credit-related insurances are products that protect the borrower and his family when used correctly, but silently increase the cost of the loan when mismanaged. The regulations in force since 2022 grant the consumer strong rights such as open demand, choice of company, uninterrupted returns within one month and automatic termination in case of early closure; However, the use of these rights is subject to time and written application. Küheylan Law Firm meticulously follows the rights of consumers and heirs in credit insurance disputes, from preparing cancellation and refund requests with the correct basis to applications to the consumer arbitration committee and Insurance Arbitration Commission, to directing the bank to insurance in case of death of the debtor.
Important Legal Notice: The legal explanations, tables and case studies in this guide have been prepared by Küheylan Law Firm for general information purposes based on the legislation and judicial decisions in force as of 2026 and do not constitute legal advice. Since contract provisions, notification dates and periods directly determine the outcome in banking and finance disputes, it is recommended that each concrete case be evaluated separately by a lawyer. © 2026 Küheylan Law Firm. All rights reserved.
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