What happens if a policyowner returns the Variable Life insurance contract within the cooling-off period?

When a policyowner returns a Variable Life insurance contract within the cooling-off period, they are entitled to a refund equal to the market value of the units plus any initial charges. This policy is designed to allow consumers to reconsider their decision after purchasing a variable life insurance policy, which often involves investment components that can fluctuate in value.

The cooling-off period typically provides the policyowner with a protective window during which they can cancel the contract without incurring penalties. By receiving a refund that reflects the current market value of the units at the time of cancellation, along with any initial charges, the policyowner is compensated fairly based on the investment performance and the costs incurred at the outset of the policy.

This outcome incentivizes policyowners to evaluate the suitability of the policy without fear of being locked into a commitment if it doesn’t meet their financial needs or expectations.