Cancelling your income protection and the cooling off period explained

While income protection is a worthwhile investment to make for many people in the workplace, circumstances change. In the event you need to cancel your policy, this guide will provide you with all the information you need.

In this guide, we will break down the process of cancelling your income protection policy and cut through the jargon. We will cover the cooling-off period, the cancellation process, switching your policy, as well as things to be wary of.  

Even though income protection is a lifesaver in the event an accident or illness impacts your earnings, there are many reasons why you may need to cancel. 

This is the third guide in our seven-part series on income protection.

For more information on income protection in general, head to the bottom of this page for links to our other guides. 

What is the cooling-off period?

The law here in Ireland gives you the right to change your mind after purchasing an insurance product, known as the cooling off period. 

The cooling-off period is a mandatory period insurers need to offer that allows you to cancel within a 30 day grace period of receiving your policy documents, or start date (whichever comes first). 

You can choose to cancel for any reason, and receive a refund. 

It is worth noting that a full refund may not be possible. This is because administrative fees associated with cancelling your policy may be deducted. The amount that may be deducted will depend on your insurance provider.

It is important to study the terms and conditions of your policy to understand what charges may apply. 

How do I cancel my policy?

Cancelling your income protection policy is quite straightforward but it's not as easy as simply cancelling your direct debit payment to your insurer. Instead, you will need to inform your insurer that you want to cancel your policy.

You must send your intentions to end your cover in writing to your insurer.

If you are considering cancelling your cover we recommend speaking with a financial advisor first. This is because you will no longer be able to make a claim on this cover once it is cancelled.

Therefore, it is always worth carefully considering your situation before cancelling. 

Another thing to consider is the price of your income protection policy. If you take out an income protection policy in the future, you may have to pay a higher premium for it. This is because you will have aged, and your health may have worsened, resulting in a more expensive policy. 

Will I get a refund if I cancel after the cooling-off period?

You are free to cancel your income protection policy whenever you like, even if you have had it for the last 10 years. However, if you cancel your policy after the 30 day cooling-off period, you are not legally entitled to a refund on any of the premiums you have paid.

If you want to cancel your policy after the cooling-off period you should check the terms and conditions of your insurance policy. 

Generally, you will not receive a refund from the insurer if you cancel after the wait period. 

I want to switch to another policy, when should I cancel my existing cover?

We encourage you to not cancel your existing cover until the income protection policy you are moving to is up and running. This is because your new policy could be delayed or your application for it could be declined, which would mean you do not have any financial protection if you become unable to work due to illness or injury.

If you have aged significantly, changed jobs, or acquired health issues since you signed up for your initial income protection plan you may not be able to avail of a new policy that has the benefits and price range you desire.

Therefore, it’s important to explore your options and ensure you can sign up for a new policy first, before cancelling your current one.

If you are planning to switch when your policy comes up for renewal, ensure that you are not signed up to auto-renew, so that you do not end up paying for a policy you do not need. 

Why do people cancel their income protection policy?

People may choose to cancel their income protection for a variety of reasons. These could include: 

1. A change in your financial circumstances: A change in your financial circumstances may mean that your premiums become unaffordable. It is always important to contact a financial adviser in these circumstances.
2. Your outgoings change: Perhaps you have paid off your mortgage, or your children have moved out. In these cases, your outgoings will go down and you may feel that income protection insurance is less essential. 
3. You are unhappy with your policy: Maybe you want to move to a cheaper policy or to a policy with greater benefits. Whatever the case, if you are cancelling your policy to switch to a new one you should ensure that your new policy is up and running before cancelling your existing one.
4. You have paid off your debts: If you took out income protection to make sure you can continue to service any debts you were liable for but have now paid off, you may feel income protection is less necessary. 
5. You have other backups: Perhaps you have inherited a large sum of money, or have amassed significant savings. In this scenario, you may feel that you have enough of a buffer in the event you cannot work. 
6. Your job provides you with cover: Some employers may offer income protection as a benefit. It is worth checking whether it covers your full income, or only partially. 

If I cancel my policy now, can I get the same level of cover later on? 

Because income protection factors in age, retirement age and health issues, you are unlikely to receive the same price for your premium if you decide to take out a policy again at a later date.

Therefore, it's important to weigh up your options before cancelling your policy as you are unlikely to receive the same premium further down the line.

Can my insurer cancel the policy?

Yes, in some circumstances your insurer can legally cancel your policy. Your policy can be cancelled if:

1. You provided false or inaccurate information: During the application process, you must disclose all information surrounding your health, smoking status and employment accurately.
2. You failed to disclose all material facts: If you fail to tell the insurer the full risks of your employment the insurer can cancel your policy as they may not have offered you a policy in the first place 
3. Failure to pay: If you fail to keep up with your insurance payments, your policy will automatically lapse after 30 days and you will no longer be covered by your insurance plan. Some insurers will allow you to re-start your policy if your payments only stopped for a short time. However, if you have not paid your premium for several months, it will have been cancelled and you will need to take out a new policy.

Get income protection policies on bonkers.ie

Our free and easy-to-use income protection insurance service allows you to compare the best value policies and rates available for you from Ireland’s leading insurers.

Simply head over to our income protection comparison page, fill in a few details, and we will start comparing the different policies available from Ireland’s leading insurance providers. 

So make sure to apply online with us today to see if you could get cover in less than an hour!

You can also easily get a variety of other insurance products on bonkers.ie, including mortgage protection insurance, life insurance and home insurance. 

Don’t forget to review other everyday household bills too and compare available deals for energy, broadband and banking products to see how much you can save. 

Take a look at our other income protection guides

If you found this guide helpful, make sure you check out the other income protection guides in our series. You may be interested in the following:

• Check out our Quickstart guide for a general summary and links to other income protection guides.
• Unsure of how to use our income protection service? Check out our guide on how to compare income protection on bonkers.ie
• Not up to speed on income protection-related jargon? Check out our guide explaining the essential terms.
• Want the general lowdown on what income protection actually is? Check out our guide explaining it. 
• What are the main considerations to make when taking out income protection? Find out here.
• Still have questions? Check out our guide answering the most common questions on income protection.

You can keep up to date with our insurance-related news on our blog and guide pages. 

Any questions?

If you have any questions about any of the points discussed in this guide, or about income protection in general, contact our team today on Facebook, Twitter, or Instagram.