When you buy life insurance, there are several terms and components that you will come across. It is important to be aware of their meaning and implications before buying one. One term that you will come across while getting term insurance is the free look period.
Meaning of free look period
When you buy life insurance, you get a specific time to decide whether or not you surely want the policy. This period is known as the free look period. During this period, they charge no fees to the policyholder. Within this period, the policyholder decides whether they want to continue their policy or end it. The Insurance Regulatory and Development Authority (IRDAI) has included a free look period as a consumer-friendly provision. To avoid cancellation of your policy because of financial insufficiency, use a life insurance premium calculator and ensure that you choose the premium amount that you can afford with ease.
Understanding the free look period
The term of your free look period starts immediately when you purchase life insurance. As soon as you receive the papers of your policy, the free look period begins. The company counts calendar days in the free look period and not business days, so the weekends are also included. During this period, you can ask your insurer any doubts you have regarding your policy. If you do not find any value in the purchase of your policy, you can cancel your insurance anytime within this period. During this period, you, as a policyholder, need to think about what life insurance does and how is it beneficial to you.
Duration of the free look period
A free look period varies between different insurance companies. It can range anywhere from 10 to 15 days. If you have purchased your life insurance online, they may extend the free look period up to 30 days after getting the papers of the policy. Some insurers offer extra free look periods to senior citizens. During this period, you can decide whether you want to continue or terminate your policy. A free look period allows you to think about your decision thoroughly and decide if the policy is worth your money. Ensure that the sum assured is enough to cater to the needs of your loved ones in your absence. Before buying a policy, use a life insurance premium calculator to get an estimate of your premiums and sum assured. Also, if you have any doubts regarding the policy, now is a good time to get them cleared by the insurer.
Cancellation during the free look period
During the free look period, you can end your policy anytime you want. To cancel your policy, all you have to do is convey the message to your insurance company. Once you have revealed your decision, the insurance provider will try to understand the reason behind your cancellation. Depending upon your reasons, they might offer some alternate options that suit your individual needs. However, if none of the alternative options satisfy you, you can go ahead by filling out the cancellation form.
Once you have submitted the cancellation form, they process your request within a few days. Here are some details you need to provide during the cancellation of your policy:
- The date on which you received the papers of your life insurance policy.
- Contact information of the insurance agent, if you have purchased from one.
- Reason for cancellation of your life insurance.
- Details of a bank account to receive refunds.
Benefits of the free look period
A free look period is a thinking period that the policyholder gets to be sure of your investment. Life insurance is a vital financial instrument that will affect your life and the lives of your loved ones. The key benefit is the add-on time that you get as a policyholder to review your life insurance policy. Within this free look period, you get a refund on the premiums that you have paid when you bought the life insurance policy. If the company does not satisfy you with the terms and conditions of its life insurance policy, you can cancel it in the free look period. There are no additional maintenance fees charged in this period. The purpose of the free look period is not to cancel the policy, but to think about it in terms of your money’s worth. When you are unsatisfied, you can simply cancel without having to pay any charges during this period.
