Notice of cancellation

Notice of cancellation
See also

Notice of cancellation is statutory notice sent for most life policies, allowing the proposer to cancel the policy within 14 days of receipt of the notice if he or she decides not continue with the policy. A full refund of premium is given[1].

A notice of cancellation must be communicated clearly enough to the insured or applicant so that he understands that the insurance coverage is no longer effective. Actual receipt of the notice of cancellation by the insured is not necessary as long as the insurer complies with statutory requirements and its own internal routine procedures for mailing such notices. Evidence that the insurer followed its routine cancellation notice mailing procedures is sufficient evidence to meet cancellation notice requirements[2].

Notice of cancellation in several situations

Provisional notice of cancellation may be tendered in several situations, the most important of which are described below.

Conceivably, the party receiving provisional notice of cancellation will not want to continue the treaty anyway and will thus welcome the decision made since it relieves that party of tendering cancellation itself. If the receiving party then informs the other party that it will accept provisional cancellation as definite, the treaty will be terminated as envisaged since an agreement on its continuation has not been reached and the condition subsequent which destroys the provisional notice of cancellation has not been fulfilled.

Should, on the other hand, the party to whom notice of cancellation is tendered not respond, one is justified to assume that such party acquiesces- at least initially- to the uncertainty thus created regarding the future of the treaty. This will definitely be the case if (as is frequently done) provisional cancellation is tendered together with a request for confirmation of receipt- possibly within a certain period. No matter what approach is taken, however, the period of uncertainty regarding the continuation of the treaty will terminate on the specified date when notice of cancellation is to take effect:

Since the condition required for continuation of a treaty must have been fulfilled by this point, failure to reach an agreement by the date specified signifies that the condition has not been met[3].

Valid notice of cancellation

Fail or refuse to honor any valid notice of cancellation by a buyer and within 10 business days after the receipt of such notice, to[4]:

  • refund all payments made under the contract or sale
  • return any goods or property traded in, in substantially as good condition as when received by the seller
  • cancel and return any negotiable instrument executed by the buyer in connection with the contract or sale and take any action necessary or appropriate to terminate promptly any security interest created in the transactions


  1. J. Clark 2010, p.56
  2. R. Bunnell 2018, p.343
  3. K. Gerathewohl 2013, p.313
  4. Federal Trade Commission Decisions 2000, p.459


Author: Aneta Szewczyk