Purchasing insurance is to protect yourself from unexpected events and is considered a long-term investment. Allowing consumers to make prudent decisions and ensure their rights, the Insurance Authority implemented a cooling-off period to enable the consumer to fully reflect on and understand the impact of their purchase.
What Is an Insurance Cooling-off Period?
In Hong Kong, the cooling-off period has been adopted for all life insurance products since 1996. The policy provided an opportunity to reconsider their decision to purchase a life insurance product in a reasonable time frame. Consumers are able to change their minds during the cooling-off period. That means they could cancel the policy and obtain a refund of the premium paid.
The Hong Kong Federation of Insurers has made certain amendments since the effective date. According to the latest amendments on 1 February 2010, the terms of the cooling-off period are as followed:
- The cooling-off period is 21 days after the delivery of the policy;
- Or issuance of the welcome letter to the policyholder or the policyholder's representative
- Whichever of the above is the earlier
- Please contact the insurer if you do not receive the policy contract within 9 days from the issuance date of the welcome letter.
Is the Insurance Cooling-off Period Regulated by the Law?
The cooling-off period of life insurance was designated by the Insurance Authority as a code of the insurance industry not enforced by law.
Is the Cooling-off Period Applicable on Medical Insurance and the Voluntary Health Insurance Scheme (VHIS)?
Many insurance companies apply a cooling-off period on their medical insurance products and VHIS. However, this practice is only considered an agreement between the insurers and policyholders while not required by regulations.
How Long Is the Insurance Cooling-off Period?
As mentioned above, the cooling-off period is 21 days after the delivery of the policy. Some insurance products in Hong Kong may have a cooling-off period of 30 days. If a policyholder changes his/her mind, he/she can cancel the policy and get a full refund within 30 days after issuance of the welcome letter.
How Can You Exercise Your Rights in the Cooling-off Period?
To exercise this right, a written notice of cancellation must be signed by you and received directly by your insurer within the cooling-off period. However, this is only a common industry practice. Please read through the terms and conditions of different insurance providers.
Moreover, there is no premium refund for policy with claim records generally.
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