What is Free Look Period in Insurance?

What is Free Look Period in Insurance?

Free Look Period in Insurance is the time period within which the Policyholder can cancel his Insurance Policy and receive the full Premium refund. Free Look Period is the time given to the Policyholder to review the Policy terms and conditions. The Policyholder can terminate the Policy within the Free Look Period without any financial consequences if he is not satisfied with the Policy Features and exclusions. Mostly Insurance Policies offer a Free Look Period of upto 15 days.
Free Look Period is an important feature of Life and Health Insurance Policies that all Policyholders should be aware of.

What is the purpose of Free Look Period?

Free Look Period is a feature which benefits the Policyholder by allowing him to cancel the Policy without losing any Insurance Premium.
A Free Look Period allows the Policyholder to go through the Policy features in detail and allows him to cancel the Policy if he finds anything amiss. It is possible that the Policyholder has been missold the policy and the features differ from what was communicated to him. In such circumstances, the Policyholder might find some terms and conditions of the Policy unacceptable, and he would want to cancel the Policy. For example, buyers comparing personal health insurance wording should use the free-look window to review exclusions, waiting periods, and claim conditions. However, since the Insurance Premiums were already paid, the Policy Holder might lose out on the premiums. This is where the Free Look Period feature is useful as the Policyholder can cancel the Policy within the Free Look Period and receive the complete refund of Premium

How to cancel an Insurance Policy within the Free Look Period?

The Free Look Period begins from the Policy Issuance Date. Most Policies have a Free Look Period of 15 days, though some also have a Free Look Period of upto 30 days. If the Policyholder wishes to cancel the Policy within the Free Look Period, he must inform the Insurance Company of the same in writing or via E-Mail.
The Policyholder will need to provide the requisite documentation such as Policy Copy, Reason for Cancellation and the Premium Paid Receipt to the Insurance Company.
Additionally, the Policyholder will also need to provide a copy of the Cancelled Cheque in order to receive a refund. Many Insurance Companies allow you to cancel the Policy on the website as well.
After verifying the cancellation request, the Insurance Company will cancel the Insurance Policy and refund the Premium to the Policyholder.

What happens if you cancel your Insurance Policy after the Free Look Period?

It may happen that the Free Look Period has already passed and you still want to cancel the Policy. In such cases, the Insurance Company will refund the Premium after deducting some charges. These charges are levied based on a proportionate rate for the coverage period.

Conclusion

Free Look Period is an important benefit offered to the Policyholder. It offers some protection against mis-selling of the Insurance Policy and reduces chances of disputes between the Policyholder and the Insurance Company.
The Policyholder should make sure to carefully review the Policy Documents and ask about the Free Look Period before purchasing an Insurance Policy.
If you have any queries about your Insurance Policy, you can reach out to us via email at insurance@qian.co.in or call us on 022-35134695. We would be glad to assist you.