Cooling off period - is this unfair?

[sadie]

Was at advanced stage of buying a house when the sellers pulled out. We had arranged joint life insurance (mortgage protection) which started 1st Aug. When the house deal fell through we requested to avail of the cooling off period (30 days) and cancelled the policy in writing the last week in August(were within the 30 days). However, one party did not sign the cancellation request letter so they sent back a form asking for both signatures. Which we did and returned immediately. Now today I get a letter saying the cancellation will only be effective from 1st October. So they'll be keeping my two instalments for August & September. Not fair surely?

 

[StevieC]

While it may seem a bit harsh of the company. There is another way of looking at it. From the 1st of August you had life cover and had anything happened to you in that first month, the company involved would have been liable to pay out the benefit to your estate rather than the mortgage provider. So I can understand why the company are entitled to keep the first month premium as they would require 2 signatures to cancel the policy within Cooling off notice.

It does seem wrong however that you would get charged for a whole second month when you have advised them in writing before October 1st that you wish to cancel. At the very most I think they should only charge you a proportional amount for September from the date they received the 2 signatures (and even this is stretching it as they were aware you wished to cancel policy in August).
Charging you for cover you do not want for the rest of this month is not right and I would make it very clear to them that you think the Financial Regulator would take a dim view of them charging you for cover you do not wish. They may have covered themselves in the small print of the policy conditions but they will not like being told that you will ask the Regulator to look into it for you if they decide to charge you for cover you do not need.

My advise for the future is to get acceptance terms on your life policy but do not start policy immediately until you know the date of drawdown. You can get underwritten and have acceptance with the policy ready to go when you need it.