Have you recently bought a new insurance policy, and you are not satisfied with your insurance policy? The terms and conditions given in the insurance policy do not suit you? Or is the coverage offered not meeting your needs?
If you are new to the insurance industry, let us tell you that every insurance provider comes with a provision approved by IRDA, which allows the insured to return the policy within a specific period. This is called the ‘free-look period’.
Let us know in detail about the free-look period? What is it and how does it work? And how long is the free look period?
What is the free-look period?
Free look period is the period given to an insured to assess and review the policy document. You can terminate the insurance policy during the free look period if you are not satisfied with its inclusion and exclusion conditions which were communicated to you at the time of purchase of the policy.
You can think of a free look period as a consumer-friendly provision formulated by the Insurance Regulatory and Development Authority of India (IRDAI), which allows you to terminate an insurance policy without any penalty. The free look period is defined by the regulator. This allows you to decide whether to continue with the insurance policy or not.
The free look period is applicable to both life insurance and health insurance policies. However, the rules are different for each of these types of insurance policies. Hence it is important to understand these differences before buying any insurance policy.
How does the free look period work?
The free look period normally begins when the policy term begins. Some of them will require you to sign the delivery receipt, but your time will start as soon as you receive the policy. Also known as the free examination period, you can now carefully and thoroughly understand or review the terms and conditions of the policy.
The days counted in the free look period are calendar days, not business days. This means that Saturday and Sunday are included in your free look period. During this period the policy buyer can inquire from the insurance provider about any policy doubts. And if you are not satisfied after reviewing the terms and conditions, you can cancel the insurance policy.
How long is the free look period?
The typical duration of the free look period is usually 15 days. In case of policies purchased online, the free look period can be extended up to 30 days after receiving the policy documents. Some banks also provide additional free look period for senior citizens. If a policyholder wants to terminate the policy during this period, he/she must take care of all the necessary documents before filling the final cancellation plan.
Example of Free Look Period
Suppose there is a person named Vidyut, who lives in Delhi. And he buys a life insurance policy from his local insurance agent. After purchasing the policy, Vidyutreceives the policy documents after two days. And Vidyut’s free look period starts when he gets those documents. Vidyutnow has 15 or 30 days to review the policy and decide whether he wants to continue with the policy.
Five days later, Vidyut visits a friend to review his policy, and his friend advises him to cancel the policy and go with another insurance provider instead. Vidyut takes his friend’s advice and the next day tells his insurance provider that he wants to cancel the policy. The insurance provider is bound by law to comply with his wishes, and the insurance provider refunds the initial premium payment to Vidyut.