Free Lookup Period: Know How it Works in Insurance

Written by : Knowledge Centre Team

2023-06-27

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Free look period refers to a specific time or a window within which the policyholders can terminate their life insurance policy. In this period, no penalty fee is applicable for the policyholders. The period lasts for ten days or more. It gives you time to decide whether you want to keep the policy. This period may vary from insurer to insurer.

A free look period is available in life and health insurance policies.

Let us consider an example to understand more about the free look period.

Rishabh bought a life insurance policy online. While reading the terms and conditions, he found the policy does not align with his financial needs.

However, he had already paid the premium. What can he do now? Does he have to keep the policy even if it doesn't fulfill his needs?

That is when a free look period comes into play.

How Does Free Look Period Work?

The free look period starts with the inception of the policy. Within this period, you can cancel the policy if the terms and conditions don't align with your financial goals.

Also, this period can be used to clarify your doubts regarding the policy. If you still feel that the policy will not be able to meet your expectations, you can cancel it. To cancel the policy, you need to inform the insurance company with the reason for cancellation.

What are the Benefits of Free Look Periods?

A free look period enables you to terminate the life insurance policy you have bought if the policy doesn’t align with your needs and requirements. You can cancel the policy without paying anything extra.

Apart from this, there are the following benefits of a free look period:

You get additional time to review the terms and conditions of the policy carefully.
If you do not like specific terms or conditions of the policy, you can terminate it within the free look period.
You don't have to provide a necessary explanation as to why you want to cancel the life insurance policy. It can vary depending on the insurance company.

5 Things to Consider about a Free Look Period

While there are many advantages of a free look period, you must be aware of several other factors as well.

Enter Correct Details on the Form

When you buy a life insurance plan, fill in the correct details. Providing incorrect information may lead to cancellation of your policy.

Take Time to Review the Policy

You will have 15 days to understand all the terms and conditions of the policy. Make efficient use of this time to go through the terms, communicate with your company, and ensure that the policy aligns with your life goals.

Do not Expect a Full Refund of your Premiums

Even if you cancel your life insurance plan within the free look period, if the risk-cover benefit of your policy has already come into effect, the insurer can deduct the risk premium before cancelling your policy.

Properly Communicate with your Insurer

If you have an issue with your policy, you must communicate it to your insurer. It is better to communicate in writing, so they get a formal note from your end. If there is any delay in the cancellation of your policy, visit your insurer's office.

Save the End Date of your Trial Period in Advance

Keep track of the start and end date of your free look period. As soon as you get the policy, your trial period will begin. Also, before you sign the receipt, check the date. It is to ensure that you do not sign on a back-dated receipt. It can reduce your 15-day free look period which may lead you troubles in cancellation of the policy.

FAQs Related to Free Look Period

The term of a free look period is usually 15 days. If you have bought the policy online, free look period can be extended up to 30 days after you receive the policy documents.

You can terminate your policy if it doesn't match your financial strategies. Contact the insurer and inform them the reason behind cancellation. You need to share your request in writing to the life insurance company.

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised to exercise their caution and not to rely on the contents of the article as conclusive in nature. Readers should research further or consult an expert in this regard.