While buying insurance policies, the free look period refers to a specific amount of time or a window within which the policyholders can terminate their chosen policy. In this period, no penalty fee is applicable for the policyholders. Generally, a free look period lasts for ten days or more, which allows a holder to decide whether they want to keep their policy or not. This period may vary according to the regulations of several insurers.
Many individuals usually associate a free look period with only a term insurance plan or a life insurance policy. The Insurance Regulatory and Development Authority (IRDAI) of India has included a free look period in health insurance policies. It is a consumer-friendly provision that is only available for these two sectors presently.
Insurance has always been a necessity. While there has been significant growth in health-related problems due to the pandemic, the importance of life and health insurance policies have increased crucially. Here's everything that you need to know about a free look period in insurance policies.
How does a Free Look Period Work?
The free look period starts typically when the term of the policy starts. A few of them will require you to sign a delivery receipt, but your clock will start as soon as you receive the policy. Also known as the free examination period, you can now understand or review the policy's terms and conditions carefully and thoroughly.
The days that get counted in a free look period are the calendar days, not the business days. This means that Saturdays and Sundays do get included in your free look period. During this period, a policy buyer can even inquire to the insurer regarding any policy doubts. And if you're not satisfied after reviewing the terms and conditions, you can ultimately cancel the insurance policy.
It is essential to note here that a free look period is only available in the policies that have a term of at least three years in health policies. Other short term insurance plans in the health sector do come with the provision of a free look period. This is as per the rules and guidelines of IRDAI.
What is the Duration of a Free Look Period?
The general term of a free look period is usually 15 days. In the case of policies bought online, free look periods can extend up to 30 days after receiving the policy documents. A few of the banks also provide extra free look periods for senior citizens. If a policyholder wishes to terminate the policy during this period, they have to take care of all the necessary documentation before filling the final cancellation plan.
Long term insurance plans can have a wide variety of benefits for the people. But, to ensure that you are thoroughly satisfied with your policies, you have to make the most of your free look period. Comprehend the terms and conditions of your chosen policy correctly, and communicate with your insurer if you have doubts. Also, always remember that you need to submit the original documents of premium receipts, cancelled cheques, etc. If the documents are not available, an Indemnity bond can also serve the same purpose.
Can you Cancel a Life Insurance Policy during a Free Look Period?
Yes, you can certainly terminate your policy plans if they do not match the requirements of your long-term insurance strategies. Solely designed for your benefits, a free look period serves the purpose of helping you decide whether you want the policy or not. To cancel a life or health insurance plan, you need to convey this message to your insurance provider. Once you do this, your agent will usually provide you with a few alternate options that can suit you. However, if you still do not wish to keep the policy, you can end it by filling up the cancellation form from the bank's official website or the bank's branch office.
Once the cancellation form is submitted to the bank, it will take a few days to process your request. Before you put in a cancellation request, make sure that you have the necessary details given below:
a) The date on which you received the official policy documents.b) Complete contact information of the agent (if you have purchased the policy through an agent).c) Reason for the cancellation of the long term insurance plan (if applicable).d) A valid bank account to finally receive the refund.
A noteworthy point to keep in mind is that while it is possible to own multiple life insurance policies, it is more convenient to wait for the current policy to cancel before looking out for other options. If you apply for another policy at a new insurer, they may think you are trying to purchase more insurance policies than you need, thus declining your application. No amount of refunds will be made if you cancel your policy after the free look period.
What are the Benefits of a Free Look Period?
A free look period enables a policyholder to terminate the life insurance policy that they have bought. In case, the policy bought doesn’t align as per your needs and requirements, you can always go ahead and cancel the policy without paying anything extra. Apart from this, there are the following benefits of a free look period:
1) The main benefit of a free look period is the additional time it provides to policyholders, thus enabling a policyholder to review each term and condition of the policy they bought.
2) If a policyholder does not like specific terms or conditions of the policy, they can terminate it within the free look period to avoid an additional maintenance fee.
3) Within this free look period, you can also get a refund of a few of the premiums paid while buying a long term insurance plan.
4) One of the best features of a look free period is that you don't have to provide a necessary explanation as to why you want to cancel the life insurance policy. This can vary depending on the various insurance companies, but the customer service will not try to talk you out of cancellation. As long as you're following the time frame rules, you will get your money.
5) A free look period especially allows a policyholder to ensure that they want to dedicate a part of their cash to cover administrative costs regularly.
How can you Make the Most of your Free Look Period?
While there are many advantages of a free look period, you must be aware of several other factors. These factors will help you to receive all the essential benefits provided by a free look period. Some of them include:
1. Enter correct details on the form
When you purchase a term insurance plan, remember to fill in the correct details of your address and contact number. This will ensure that you can explicitly listen to your plan's features and details during the mandatory welcome call.
2. Take time to review the policy
Generally, a policyholder has 15 days to understand all the details and conditions of the policy. Make efficient use of this time to look through the terms, communicate with your company agent, and make sure that you want to keep the policy.
3. 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 receive the policy, your trial period will begin. Also, before you sign the receipt, always check the date. This is to ensure that you do not sign on a back-dated receipt. This can cut your 15-day free period and make you miss your cancellation period.
4. Properly communicate with your insurer
If you have an issue with your policy, you need to communicate it in a written manner instead of oral communication. It is better to communicate in writing to a company, so they get a formal note from your side. At times, a few agents try to delay your side of information to end the free look period. In that case, you need to visit your insurer's office to submit a policy's cancellation.
5. Do not expect a full refund of your premiums
Even if you cancel your term insurance plan within a free look period, it is liable to expenses on stamp duty and medical tests. If the risk-cover service of your policy has already come into effect, an insurer can deduct the risk premium before cancelling your policy.
It is also essential to note that only cancellation is allowed during a free look period in health and life insurance policies. If you want to port the policy, you have to wait for the time of renewal. When it comes to refunding the premiums, an insurer can deduct a few expenses to compensate for the company's charges. Therefore, a buyer must know the features and refund services before buying the policy or paying regular amounts to retain the chosen policy.
This will help them to properly reap the benefits of choosing a term insurance plan and its free look period. You can find some of the best term insurance plans at our Canara HSBC Oriental Bank of Commerce Life Insurance.