Did you know there is a cooling off period for life insurance policies? Most people are aware that you have a cooling-off period when buying a house … some are also aware that if you buy a car from a dealer, you also get a cooling off period. However, most people aren’t aware that life insurance policies have the same sort of grace period!
Life insurance policies in Australia
The government requires life insurance companies to offer a cooling off period of at least 14 days … and it can be a very wise long term decision to utilise it. Today we check out how you can best make use of your cooling off period in life insurance contracts.
Australian life insurance policies have a 14 day cooling off period
The 14-day cooling off period for life insurance contracts mandated by the government:
- Starts either when you receive your Certificate of Insurance (and the associated policy document), or five days after you signed the contract or paid your premium
- Last for 14 days of any type. Where some cooling off periods measure time in clear business days, life insurance contract cooling off periods are measured in ordinary days.
Life insurance certificate of insurance & policy documents
Note that if you haven’t received your Certificate of Insurance and policy document within those five days after you’ve signed the contract, you should follow up immediately with the insurer – otherwise time will be ticking away and you won’t have the specific information you need to make sure the life insurance suits you.
What should I do in my cooling off period for life insurance?
You have several options:
- Closely review the policy document yourself
- Have a financial adviser review it
- Have your legal representative review it
Remember that, with general insurance, if you make a claim during the cooling off period then you don’t get your free cancellation rights if you find that the contract actually doesn’t suit you. With life insurance, this should almost never be an issue!