Renewal and cancellation procedures

Question 1

What are days of grace?

Answer 1

Where time (usually between 15 and 30 days following the date of renewal) is allowed to the insured to pay premium.

Once the premium is paid, cover is effective from the original renewal date and not the date premium is paid.

If the insured has indicated that they do not intend to renew the policy, then the days of grace do not apply.

Question 2

What types of insurance exclude days of grace?

Answer 2

Motor insurance, because it is a compulsory insurance required by law.

Question 3

What is a ‘cooling off’ period?

Answer 3

The right to cancel a policy without penalty and without giving any reason within 14 days.

This increases to 30 days for pure protection contracts (e.g. life assurance) or payment protection policies.

The right to cancel does not apply to short period policies of less than one month’s duration.