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In Indonesia, there is a rule. If you buy an insurance, after you send the money, you will get some info.

Some info are written more clearly after you buy the insurance.

If you don't like it, you can return it.

In practice, this is used for scamming customers.

Most customers read terms carefully before buying product. Most customers are not aware of the 14 days rule.

An Agent, for example, can claim that all money are invested. The customer puts money and found out that there is acquisition fee whose price is 100 times normal insurance rate.

The fee is not disclosed before the purchase, or if disclosed at all, in a very obfuscated way.

The insurance companies is well aware of this issue. That is why they have insurance products that "cost" 100 times normal price.

The 14 days rules are then, among other things, used to justify that the customer "consent" to the term.

It's as if the state itself help propagating the scam. Without the 14 days rule, an insurance company must write the fee more clearly before the customer buy. Now it can choose not to bother writing it, or do it less clearly.

The agent will simply not tell the customer about the 14 days rule, not tell about the unreasonable fee. The customer think he has done due diligent. Then a clearer explanation is done within the 14 days.

Typical customer would think the deal is done and that there is nothing else to consider. Hence, typical customer would not know that he has to check anything after "buying". After all we are careful before buying, not after.

I wonder if other countries have similar things.

  • In the US, you can cancel your insurance at any time and usually are entitled to at least a pro-rated refund. Many states have transparent pricing laws regarding healthcare and some forms of insurance. – Ron Beyer Oct 19 '18 at 20:11
  • The issue is that in Indonesia, the insurance have a fee 100 times normal insurance rate. The fee is already used to pay the agent that simply don't tell about the fee. The fee is written very obscurely before buying but more clearly (though still obscurely) within that 14 days period. So "canceling" insurance won't help. The fee is called acquisition fee. – Sharen Eayrs Oct 24 '18 at 15:42
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In the United Kingdom there is a law that for any online purchase or other purchase away from the businesses own premises, including insurance policies, that you have a 14 day cooling off period to cancel without penalty. The applicable parts of the law are the Consumer Contracts Regulations and if there is any form of credit agreement involved the Consumer Credit Act. It is a point of the law that the purchaser must be clearly made aware of these provisions.

  • Instead of giving customers 14 days to cool off, why not require customers to get whole accurate information before buying? What can possibly change customers' mind during those 14 days? New information he doesn't know before right? So why not put those info in the beginning? – user4951 Mar 7 at 18:24
  • @user4951: The Consumer Credit Act also requires full disclosure up front - the cooling off period is intended to avoid the problems where a) the bad news is hidden in all of the small print - you get some time to read it through and think about it & b) you find out about possible issues from other people/companies/adverts. – Steve Barnes Mar 8 at 6:02
  • Ah reasonable. One company I know sells insurance at a rate 100 times the normal price. The acquisition fee is well hidden. Agents do not tell. A bit clearer explanation of the fee is given within those 14 days. The customer, not knowing the 14 days rule, didn't check anything. – user4951 Mar 8 at 14:54
  • Full disclosure in front can be delegated to sales agent that will simply not bother telling. – user4951 Mar 9 at 14:20

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