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How does cooling off period clause work in insurance
All Hong Kong Life Insurance policies will incorporate a “Cooling Off Period” Clause in their coverage. This clause was designed to protect life insurance consumers from aggressive and unsavory sales tactics which may result in the purchase of a life insurance plan which is neither useful or wanted.
Simply put, this clause defines a period of time after the official purchase and inception of a Hong Kong life insurance plan during which the policyholder is able to cancel the coverage without any penalties or repercussions.
Under Hong Kong law a life insurance Cooling Off Period can be no less than 21 days after the start of the plan – giving the policyholder at least this long to reconsider whether the policy they have purchased is in their best interest. While the Cooling Off Period is in effect the policyholder can elect to cancel the plan and receive a refund on any premiums already paid to the insurer.
It is important to note that only policy cancellations occurring while the Cooling Off Period is in force can be refunded in full. Opting to cancel a policy after the Cooling Off Period has expired will result in any penalties or conditions as the insurance company may elect to include in the life insurance coverage being purchased.
In this regard it is almost the opposite of the Waiting Periods commonly found on Health Insurance plans.
While Cooling Off Periods can be included in other types of insurance under the same principles this is not common. Generally you will only encounter this type of clause on Hong Kong Life Insurance products.
If you would like any additional assistance in understanding the way in which Cooling Off Periods are handled in Hong Kong, or if you would like to learn more about the Hong Kong Life Insurance market, please contact us and speak to an expert broker today!
Answered on: 21 August, 2018 10:08
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