Cooling-off periods are in place for most insurance and investment policies,writes Laura Slattery.

Buying a financial product is like ordering a meal: you are faced with a menu of choices, some of it using terms you don't understand, and there may be someone looming over you, silently imploring you to make a decision - any decision - and just stop dithering.

So do you play it safe and stick to what you know or, on the enthusiastic advice of others, try something new?

And if you do, even after long periods of careful deliberation, regret your choice, can you simply click your fingers, send it back and pick something else instead?

The Irish Financial Services Regulatory Authority (IFSRA) says it's important that consumers are not rushed into making hasty decisions on any investment.

But if you do have an immediate bout of buyers' remorse about a financial product, statutory "cooling-off" periods are in place on most types of insurance and investment policies and credit agreements.

Under the terms of the Consumer Credit Act, consumers have a right to a 10-day cooling-off period, during which they can withdraw from a credit transaction, excluding mortgages.

Meanwhile, regulations governing the sale of life assurance products give consumers a 15-day window in which they can change their mind and cancel a policy.

The 15 days start to count down from the date the policy schedule is sent to you, not the day you first spoke to the life assurance company or broker and agreed to buy.

Consumers have no statutory right to a cooling-off period on general insurance products. However, some online sellers of travel and home insurance may offer consumers a 14-day right to cancel.

Further protection is on the way.

EU legislation on distance selling - products sold online or over the phone - must be extended to financial services and products by October 9th this year. Under the legislation, consumers will have a right to withdraw from a product within 14 days, or 30 days in the case of contracts for life assurance and pension products.

Again mortgages and "property credit" will be excluded.

According to Mr Tice O'Sullivan, financial adviser at Prima Finance, cooling-off periods on mortgages wouldn't be much help for house-hunters because of the time it takes to complete property transactions.

"It doesn't apply to mortgages because the 10 days you get from when you are given the loan offer will have expired by the time you draw down the loan anyway," he says.

And on personal and motor loans, people will frequently agree to waive their rights to the cooling-off period because they want to get their hands on the credit straight away.

However, IFSRA has warned consumers not to sign any waivers to a cooling-off period until they are sure what they are getting themselves into.

"For most products, insurance companies will send out the cooling-off period notice with the quote. I'm not saying it's up in bright lights, but it's there," says Mr O'Sullivan.

So how often do people do U-turns and start to wish they had signed across the dotted line in invisible ink?

Not very often, according to life assurance broker Mr John Geraghty, chief executive of LABrokers.ie.

"Out of thousands of applications received by LABrokers.ie, I have only ever come across three persons who have exercised this right," he says.

In one case, an applicant for a Special Savings Incentive Account (SSIA) opted for the higher risk version of the Government's saving scheme, exposing the savings to fluctuations in the equity markets.

"On receipt of the equity-based policy the person got cold feet and decided they would prefer a deposit-type SSIA instead," Mr Geraghty says.

In another case, a consumer bought a type of life assurance policy known as a level term assurance policy to protect a mortgage.

"After receiving the policy and within the cooling-off period they decided to take out a more cost-effective mortgage protection policy instead," says Mr Geraghty.

A mortgage protection policy, also known as decreasing term assurance, is cheaper than level term assurance as the sum covered reduces in line with the outstanding balance on the mortgage. "This change of product was facilitated without quibble," says Mr Geraghty.

In both cases, the consumers were able to switch products without incurring any financial costs.

However, Mr Geraghty warns that consumers investing in unit-linked products - such as with-profits policies - may not always get the full amount of their initial capital back even if they back out within the cooling-off period.

The provider is not allowed impose an early surrender penalty on an investment policy cancelled within the 15 days: however, if the unit price has fallen sharply the life company is within its rights to pay back the new value of the policy, Mr Geraghty explains.

Insurance companies can't be expected to pick up the tab for a market fall, Mr O'Sullivan concurs.

"Take the worst case scenario of somebody who bought an investment on September 10th, 2001.

Obviously, September 11th happened the next day.

"When the market re-opened, it crashed big time.

"There wouldn't be any fees or charges for withdrawing from the investment product, but the cooling-off period wouldn't protect them from the market loss," he says.

So what happens if consumers don't have second thoughts until much, much later, when the 10-15 period has expired?

On a range of investment products with fixed terms, financial services companies frequently apply exit penalties that stop consumers from benefiting from hindsight without paying a price.

Insurance policies generally work on an annual contract: it is often impossible to extract yourself until your policy comes up for renewal.

However, in the case of motor insurance, where drivers will need to have continuous cover in order to avoid breaking the law, insurers must give policyholders 15 days' notice of their renewal date.

This should ensure that motorists have enough time to shop around for alternative cover more to their taste.