What is the 14 Day cooling-off period in Insurance?

Cooling off period in Insurance for an old couple

The cooling-off period is an essential part of any kind of insurance policy. It gives you time to make sure that you’ve made the right decision about the type of cover you want, and that it will suit your needs.

What is the Cooling Off Period?

A cooling-off period is an option that allows you to cancel your new insurance policy within a certain amount of time. The exact length of this period varies by insurance company and policy, but it usually lasts between 10 and 15 days after you sign up for coverage. 

If you decide to cancel your policy before the end of this time frame, you'll have to pay a penalty fee. The exact amount will vary depending on where you live and the type of policy you purchased, but it can range from 5% to 10% of your premium or even more if you signed up during an open enrollment period. 

You may also have additional fees if you're cancelling within 30 days of receiving your first bill or making any claims on your policy within that time frame. The cooling-off period is the time period you have to decide whether or not you want to keep the insurance policy. In most cases, it's 14 days.

How Does Cooling-off Period Work in Insurance?

The cooling-off period starts from the date of purchase of the policy and ends on the 14th day after the purchase. If you cancel the policy during this time, you will get a full refund of your premium (less any claims made). 

The cooling-off period applies only when people decide to buy insurance policies from a third party. It does not apply if they buy directly from their banks or financial institutions.

In some cases, your provider may offer a cooling-off period that lasts longer than 14 days - for example, 30 days or 45 days. 

Your insurer should tell you how long your cooling-off period is before you purchase an insurance policy. You can also ask them about this when you call them up at any time before or after making a claim or buying an insurance product.

Will I be charged a Cancellation Fee during the Cooling-off Period? 

The cooling-off period is not to be confused with the cancellation notice period, which is the amount of time given to customers by insurers before their policy expires. 

For example, if a person has bought an insurance policy for three years and wants to cancel it after one year, he or she must provide at least one cancellation notice period in advance. 

This means that the customer has to inform his or her insurer about his or her desire to terminate the contract at least six months before its expiry date. The best way to ensure a steady cancellation policy is to compare policy programs across a range of factors. Get My Policy offers the best comparison tool to help you find an easy-breezy cancellation policy.

By Author: Kate Smith | 24 May 2022
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