All RE5 questions
Financial Products Apply knowledge of the financial products and services environment
Which of the following correctly describes the 'cooling-off' right in long-term insurance?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) A limited period after inception during which the policyholder may cancel, subject to conditions (e.g. no benefit yet paid).Correct
- b) An unlimited right to cancel at any time for a full refund of all premiums ever paid.
- c) A right that exists only if the insurer agrees.
- d) A right to change the sum insured without underwriting.
Why this is the answer
A cooling-off period lets a policyholder cancel shortly after inception, subject to conditions such as no claim/benefit having been paid. It is a limited early-cancellation right, not an open-ended refund or a re-underwriting right.
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