Understanding the Free Look Period in Insurance

The customer is the king, and we insurers firmly believe in it. To improve customer experience, insurers have introduced several features in life insurance products, including the ‘free look period’. In a nutshell, this means that if the life insurance policy you have purchased doesn’t meet your expectations and needs, you can cancel it without facing any penalties or financial loss. It just needs to be within the free-look period of the policy. You can consider buying life insurance online with a free look period for a more convenient experience.

Let’s discuss this in detail.

What is the Free Look Period?

The free look period in a life insurance is a specific timeframe during which you can review your newly purchased insurance policy in detail. If, during this time, you decide the policy isn’t right for you—maybe for reviewing the terms are unclear, or the coverage isn’t what you expected—you have the right to cancel the policy and receive a full refund. This period typically lasts between 15 to 30 days, depending on the insurer and the type of policy.

Example of the Free Look Period

Let’s say you’ve just purchased a life insurance policy. After receiving the policy documents, you review the terms and realize that the coverage doesn’t match your needs. During the free look period, you can contact your insurer, request a cancellation, and get a refund. For instance, if you cancel within the first 15 days of receiving the policy, you’ll get back the premium you paid, minus any administrative charges or costs associated with medical tests.

What Is the Significance of the Free Look Period in Insurance?

The free look period is a crucial consumer protection feature in insurance. It ensures that policyholders can fully understand their policy’s terms, benefits, and exclusions before committing long-term. If you’re not satisfied, you can cancel without losing your hard-earned money. This period allows you to make an informed decision, ensuring that the policy you choose truly aligns with your financial goals and needs.

How Does the Free Look Period Work?

Here’s how the free look period in insurance typically works:

• Duration: The free look period usually lasts 15 to 30 days, depending on your insurer and the type of policy. The countdown begins when you receive your policy documents.
• Review: During this period, carefully review all aspects of your policy, including the terms, conditions, benefits, and exclusions. Make sure it matches what was promised during the sale.
• Cancellation Request: If you decide to proceed with a freelook cancellation, you’ll need to submit a formal cancellation request to your insurer within the free look period. This request should be in writing and state your reasons for cancellation.
• Refund Process: Once your cancellation is processed, the insurer will refund your premium. However, they may deduct certain charges like stamp duty, medical examination fees, and proportional risk premium for the coverage period.

Factors to Keep in Mind About the Free Look Period in Insurance

Before you decide to use the free look period, here are some important considerations:

• Ask the Insurer About Free Look Period Details: Make sure you fully understand the free look period details. Ask your insurer about the exact duration and any specific procedures you need to follow if you decide to cancel.
• Be Aware of the Time Limit for Cancellation: Remember, the free look period is time-bound. If you miss the deadline, you might not be able to cancel your policy without incurring penalties.
• Submit a Formal Cancellation Request Within the Period:  If you decide to cancel, do so formally within the specified period. This typically requires a written request, either through a letter or an email.
• Provide All Required Policy Details and Documents: When submitting your cancellation request, include all relevant policy details like your policy number, personal information, and reasons for cancellation. You might need to submit additional documents, such as your policy bond or identification proof.

Consequences of Cancelling Your Policy After the Free-Look Period

Cancelling your policy after the free look period has ended can lead to several consequences:

• Penalties: You may face penalties or charges for cancelling after the free look period.
• Loss of Premiums Paid: The premiums you’ve paid may not be refunded, or you might only receive a partial refund.
• Policy Surrender: If you wish to cancel after the free look period, you might have to surrender the policy, which could result in a reduced payout based on the policy’s surrender value.

Wrapping it Up

At Bandhan Life, the customer is the centre of our universe and that’s why we keep innovating to improve customer experience, with easy buying journeys and zero documentation. The free look period is the cherry on the cake. It’s a consumer-friendly option that ensures you’re making the right decision for your financial future.

Check out our bouquet of life insurance products and enjoy the benefits of superior customer experience.

Frequently Asked Questions

What is the refund process of cancelling an insurance policy within the free look period?

When you cancel within the free look period, the insurer typically refunds the full premium paid, minus any deductions for administrative charges, stamp duty, or medical tests.

How long is the free look period?

The free look period usually starts from the day you receive your policy documents. It typically lasts 15 to 30 days, depending on the insurer.

What is the free look period for 30 days?

Some insurers offer a 30-day free look period, especially for policies purchased online or through distance marketing. This extended period gives you more time to review your policy and make an informed decision.