Right of Rescission

The "Right of Rescission" within insurance offers policyholders a designated period during which they can cancel their newly issued policy without facing any penalties. This provision grants the policyholder time to thoroughly examine the policy's terms and conditions, allowing them to decide whether to continue with the coverage or rescind the contract. Aimed at consumer protection, this right ensures individuals have the chance to fully comprehend their insurance coverage and confirm it aligns with their requirements. Commonly known as the "free look" period in the insurance sector, it affords policyholders a specific window to assess the policy details and determine if the offered coverage satisfies their needs.

Key aspects of the Right of Rescission in the context of Life Insurance and Living Benefits in Canada include:

1. Free Look Period: The duration of the free look period can vary by province and policy but typically ranges from 10 to 20 days after the policyholder receives the policy documentation.
2. Full Refund: If the policyholder decides to exercise their Right of Rescission during the free look period, they are entitled to a full refund of any premiums paid, without any charges or penalties.
3. Notification Requirement: To rescind the policy, the policyholder must notify the insurance company in writing within the free look period. The specifics of how to exercise this right are usually outlined in the policy documents.
4. Purpose: The Right of Rescission ensures that consumers have a sufficient opportunity to understand their insurance coverage fully and to make an informed decision about keeping the policy. It protects policyholders from being locked into a policy that does not meet their expectations or needs.
5. Regulatory Protection: This right is part of consumer protection regulations in the insurance industry, emphasizing transparency and fairness in the sale of insurance products.

The Right of Rescission reflects the commitment of the Canadian insurance industry to consumer protection, allowing individuals to make confident and informed decisions regarding their Life Insurance and Living Benefits coverage.