To retain customer interest and satisfaction, insurance companies offer a specific benefit known as the free look period. This is a defined window during which you can cancel or surrender your policy if you're not satisfied with its terms. If you choose to surrender the policy within this period, the insurance company will refund the premium you paid, making it a valuable safety net for policyholders.
A free look period allows you to cancel your insurance policy without paying surrender charges, provided the cancellation is done within a specific timeframe which varies from insurer to insurer, from the date the policy was issued. If you return the policy within this period, the insurer refunds your first premium, possibly after deducting minimal charges like medical exam fees or stamp duty.
In this article, we will delve into the purpose of the free look period, explain how it works, and highlight essential things to keep in mind when canceling your policy within this timeframe.
Purchasing life or health insurance is the need of time. Insurers provide different short-term and long-term policy plans to you. You choose the one that suits your needs. But before completing the policy purchase, you check the terms and conditions. Sometimes, you just feel something is not satisfactory in the policy, then you are allowed to cancel it within the free look period.
Ultimately, the free look period is a window time in which you may cancel your insurance policy. For this, you are not forced to pay any charges to surrender the policy. Additionally, your first premium will get refunded if you return the policy within the time. Usually, the policy cancellation period is 15 days from the date of policy issue. But the insurer may extend this time up to 30 days.
A free look period is a convenience given to policyholders to make a firm decision. Here are the purposes that the free look period serves.
1. Gives Enough Time to Observe the Policy
The insurance company provides you enough time to review the policy. In this free look time period, you can carefully read and understand the policy’s terms. Between this period, you can go through every limitation, coverage detail, and exclusion. It surely will help you to invest for a long term.
2. Provides Opportunity to Rethink
Sometimes, you just pick the plans in a hurry. So, there could be the possibility of finding some unacceptable conditions. As a result, you may rethink whether to buy a policy or cancel it.
3. Prevents You Against Mis-Selling
Agents may present a policy that doesn't align with your requirements. So, it is required to check the terms and conditions. The free look period provides you with an opportunity to recheck the policy plan. You can cancel it if you find it misrepresented.
4. Let’s You Compare Different Plans
A number of policy plans are available to invest. Policyholders have various affordable options. The free look period lets the policyholder compare different policy plans. If they find a better choice, they can simply port without paying any charges.
5. Helps to Make a Risk-Free Decision
If you are confused about any of the terms, the free look period lets you clear it. It is better than terminating the policy once you invest in it. A full policy study would prove fruitful to make precise decisions.
Essential Things to Keep in Mind
Consider the below factors before discontinuing the free lock period of life or health insurance policy.
1. Ensure the Free Lock Period
Confirm whether the insurance company offers a free look period or not. In some health insurance plans, the free look period comes when the policy comprises 3-year tenure.
2. Remember the Free Look Period Validity
You have to keep the date of the policy issue in mind. The free look period starts from the date when you get the policy document. Generally, the free loop period is given up to 15 days.
3. Apply to Request for Cancellation of Policy
Do not forget to apply a written request for policy cancellation to the insurance company. Otherwise, you need to submit the request from the insurer's website.
4. Provide Details Asked by Insurer
Once you fill out the request, the insurer may inquire about the time of the policy purchase. Also, you need to mention the reason for canceling the policy and the agent as well. Provide every detail appropriately.
5. Submit Documents
Basically, you are required to submit a policy contract, first premium receipt, and a canceled cheque. Do not forget to keep these documents with you.
An insurance policy is a registered contract between the insurance company and the policyholder. Typically, policyholders can review the policy. If they observe any dissatisfactory conditions, then they can terminate it within the specific time. Let’s have an understanding about the factors that streamline the free look period process.
Generally, the insurance companies provide a free look period of 15 to 30 days. The rhyme frame may differ. Whether it’s life insurance or health insurance, the duration of the free look period is determined. The free look period starts when your policy gets issued.
2. Cancellation Process
After reviewing the policy, policy termination can process the cancellation. For this, a request for cancellation must be submitted online or in written form to the insurer.
3. Refund
Insurance companies refund the premium by deducting the applicable charges. Most probably, the administrative cost gets deducted from the premium price. But it may change as per the type of deduction.
Following are the steps to cancel the policy in the free look period.
1. Inform the Insurer
Notifying the insurance company about policy cancellation is the first action to be taken. You can inform them by sending an email or via phone. You can also meet them in person and explain to them the reason for canceling the policy.
2. Send a Request for Cancellation
You are required to submit a cancellation request in written format. In this, you need to mention your decision of policy cancellation within the free look period.
3. Attach Required Documents
Submit the policy certificate, receipt of paid premium, and cancelled cheque. Apart from this, submit the Free Look request form filled and signed by you. It is applicable only if the company has provided the form to you at the time of policy purchase.
The free look period is a time of 15 to 30 days given by insurers to policyholders. Within these days, policyholders can study the policy details and cancel it.
2. Is a Free Look Period Available for All Types of Insurance Policies?
No, there are numerous types of insurance policies available. But the free look period is available only for health and life insurance.
3.Can I Cancel My Insurance Policy After the Free Look Period?
Yes, you can cancel the insurance policy at any time, but you won't be eligible to receive premium price refunds. In such cases, the policy surrender charges are deducted from the premium. You might get a partial refund. However, it depends on the insurer and policy type.
4. Do I Need to State the Reason to Cancel a Policy During the Free Look Period?
No, it's not obligatory to mention the reason for canceling the policy. But it is recommended to explain why you choose to cancel the policy.
5. Will My Policy Benefits Be Affected if I Use the Free Look Period?
No, it won't affect your benefits. But only if you cancel the policy within the specified time limit. If you do so, you may get a refund of the premium.
6. Are All Insurers Required to Offer a Free Look Period?
No, not all insurers offer a free look period. But most of the companies have been observed providing the services. You need to make it conform by consulting with the company.