A consumer protection period after purchasing insurance during which you can cancel the policy and receive a full refund of premiums paid. For life insurance, the Life Insurance Code of Practice commits insurers to at least 30 calendar days (the statutory minimum is 14 days). This allows time to review the policy details 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.
For life insurance, the Life Insurance Code of Practice commits subscribing insurers to a cooling-off period of at least 30 calendar days. The statutory minimum under the Corporations Act 2001 is 14 days, and your policy's exact period is stated in the PDS.
For cover held inside superannuation, check the fund's terms and the PDS.
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 the cooling-off period, 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 after the cooling-off period stated in their PDS has expired. The cancellation still takes effect, but the premiums already paid are not refunded
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