A consumer protection period (typically 14-30 days in Australia) after purchasing insurance during which you can cancel the policy and receive a full refund of premiums paid. This allows time to review the policy details and ensure it meets your needs without financial penalty.
The cooling-off period is a mandatory consumer protection allowing you to cancel a new insurance policy and receive a full premium refund. It is governed by the Insurance Contracts Act 1984 and Corporations Act 2001 and applies to most Australian life, health, and general insurance policies.
| Purchase channel | Cooling-off length | |---|---| | Direct purchase (online, phone, insurer) | 14 days | | Sold through a financial adviser | 30 days | | Held inside superannuation | May be extended to suit fund processing |
The longer adviser period exists so you can review the Statement of Advice that accompanies personal advice.
The cooling-off period begins from the earlier of:
Australian insurers must notify you of cooling-off rights in the policy welcome pack and PDS.
Contact the insurer in writing (email is usually accepted) before the deadline, stating your intention to cancel. Keep a record of the date you sent the notice.
After purchasing income protection insurance through a phone sale, a consumer receives the PDS and realizes the waiting period is 90 days instead of the 30 days discussed. Within 14 days, they cancel under cooling-off rights and switch to a provider with a 30-day waiting period
A couple buys life insurance through an adviser for $2,800 annual premium. During the 30-day cooling-off period, they obtain a second opinion revealing equivalent coverage available for $2,200 annually. They cancel the first policy without penalty and purchase the more competitive option
An insured person attempts to cancel on day 16 of a 14-day cooling-off period but discovers the period has expired. They're required to pay a cancellation fee of $150 and forfeit one month's premium, totaling $280 in costs
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