All RE5 questions
Financial Products Apply knowledge of the financial products and services environment
A client takes out a long-term insurance policy and, a week after receiving the policy summary, changes her mind. No claim has been made. Which statement about cooling-off is correct?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) She may cancel, but she will forfeit all premiums she has paid.
- b) She may cancel only if the insurer agrees to it.
- c) She may cancel, subject to the conditions.Correct
- d) She may not cancel, because the policy has already started.
Why this is the answer
A cooling-off right lets a policyholder cancel within a limited period after receiving the policy summary, provided conditions are met, such as no claim having been made or paid. Within that period she need not obtain the insurer's agreement. Rules on refunding premiums and deductions apply, but she does not automatically forfeit everything.
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