Cancellation period (right of withdrawal)
The period during which a policyholder may withdraw from an insurance contract without reason or penalty, thirty days for life insurance, fourteen days for distance or doorstep sales, extended if required information was missing.
The right of withdrawal lets the purchaser of an insurance contract go back on the commitment within a set period, without giving reasons and with a refund of sums paid. The French Insurance Code provides several. For life and capitalization contracts, article L. 132-5-1 grants thirty calendar days from conclusion of the contract. For distance sales, article L. 112-2-1 grants fourteen days for contracts taken out by a consumer. For doorstep or workplace solicitation, article L. 112-9 also grants fourteen days. Some insurance is excluded, notably contracts of less than a month and travel insurance. In life insurance, the period does not start as long as the insurer has not provided the required information documents, which long allowed withdrawals years after purchase to escape financial losses; the law capped this extension at eight years and case law penalized withdrawals made in bad faith. For the insurer, documentary compliance at the time of sale is therefore protection against a deferred financial risk.
Textbook case: a saver invests 100,000 euros in a unit-linked life contract without receiving the compliant information notice. Three years later his savings are worth only 70,000 euros; he exercises his withdrawal right, whose period had not started, and claims repayment of the 100,000 euros paid. The court checks whether he is acting in good faith or to offload a market loss.
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