Option to waive the life insurance contract

Option to waive the life insurance contract

Option to waive the life insurance contract: the principles
Due to certain circumstances, it may happen that a person who has taken out a life insurance policy decides to give it up. Compared to other insurance policies, it is relatively easier to terminate a life insurance contract, you just need to do it the right way. Otherwise, expect penalties. So how do you go about canceling your life insurance policy?

What is the deadline for exercising the right of withdrawal?
Extension of the waiver period
A time limit for exercising the right to waive the life insurance contract

Article 132-5-1 of the Insurance Code is clear: “Any natural person who has signed a proposal or a life insurance or capitalization contract has the option of waiving it by registered letter with request for notice of receipt during the period of thirty completed calendar days from the moment it is informed that the contract has been concluded. "

In practice, this means that if you have just taken out a life insurance contract, you have the possibility of reconsidering your decision within 30 days of entering into the contract. More precisely, 30 days after your insurer has informed you that the contract has been concluded (receipt of information and mandatory documents). Note that since 2008 this waiver option also exists for group life insurance contracts according to case law: Cass. Civ 2nd, July 10, 2008, n ° 07-12.070.


 
To exercise your opt-out option, you must send your insurance company a registered letter with acknowledgment of receipt. In principle, your insurer has an obligation to give you all the amounts paid on the contract within 30 days of receiving the waiver.

If he does not, the sums produce interest at the legal rate plus 50% for the first two months of delay. If your insurer still does nothing after this period, the sums will produce interest at double the legal rate.

Extension of the waiver period

Article 132-5-2 of the Insurance Code amended by the law of December 30, 2014 states that a subscriber to life insurance can exercise his right of waiver, even beyond the 30 days provided for by law. Thus, it is possible to exercise the right of renunciation within 8 years from the moment when the insurer has informed the subscriber that the contract has been concluded. However, this extension is only possible if the insurer has not provided the policyholder with an information notice after the conclusion of the contract. This notice must contain the conditions for exercising the waiver as well as the essential provisions of the contract.

In addition to this failure of the insurer to provide information, the same article specifies that the extension of the waiver period is only possible for subscribers in "good faith". Several judgments of the Paris Court of Appeal rendered in 2017 and 2018 highlighted objective criteria to determine whether the subscriber is in good or bad faith. A subscriber exercises his right of renunciation in good faith when:

"He is not initiated into the financial mechanisms, in the event of the insurer's breaches of its pre-contractual information obligations, on the form or on the substance; "
“He is an insider with a good knowledge of financial mechanisms, only in the event of a real failure to communicate pre-contractual information. "
Note, however, that the exercise of the right of withdrawal must not constitute an abuse of rights. This is recalled by the judgment of the Second Civil Chamber of the Court of Cassation of October 5, 2017 (n ° 16-22.557). In this case, an individual signed up for a group life insurance contract in 2007 and paid 30,000 euros as a premium. In 2013, 6 years after the conclusion of the contract, he decided to exercise his right of withdrawal by invoking a lack of pre-contractual information from his insurer and requested the cancellation of the contract and the return of the sums he paid.

The judges of the Court of Cassation considered that even if it is legitimate for an insured to exercise his right to waive a life insurance contract several years after the subscription by invoking the non-compliance by the insurer of his pre-contractual information obligation, the fact that he has made several payments to the contract constitutes an abuse of rights.