What is the Free Look Period in a Life Insurance?
The Free look period is the time given to the policy buyer to assess and review his policy details. During the free look period, the policy buyer has the right to cancel the policy, if they are not satisfied with the terms that you were told at the time of purchase.
IRDAI in its quest to be transparent and customer friendly has initiated the free look period so that customers get adequate time to understand the policy terms.
Free Look Period is applicable for both life and health insurance policies. However, the rules differ for both policies. A customer needs to know about the free look period before buying any policy.
For example, if you buy a life insurance policy, and you later find that the policy does not fulfill your needs after reading the terms of the policy, you can take advantage of the free look period and cancel it.
Why Free Look Period is essential?
Buying a life insurance policy can be confusing for many, especially for those who don’t know how the policy works. Moreover, people get the policy documents only after they make their first premium.
With a multitude of companies offering life insurance, it is extremely difficult to assess the policy wordings.
For example, consider you are buying a car. Would you go ahead and make a purchase just by seeing an ad on a website or a TV. You would review the pros and cons of the car and factors such as driving comfort, fuel efficiency, etc, right? Bringing that analogy in here, the policy seller might explain roughly the benefits of the policy, however, you can get into the finer nuances only when you read the policy documents by yourselves.
At times, we’ve seen people trust the insurance agents blindly and go ahead to purchase the policy without knowing if it fits your requirement well. It is why sites like Fincover which deploys advanced AI algorithms gets your requirements and fetches you the most appropriate policy. Still, that does not discount you from not reading the policy terms and conditions. No matter, where you purchase the policy, you must read through the terms and conditions. You can consider this timeframe to clear your clarifications about any policy.
Most Insurers have pre-defined criteria for giving you the premium paid back. While placing a cancellation request, you should submit the policy documents, premium receipt, and a canceled cheque. On the other hand, if you offer the cancellation after the freelook period, you will be charged a proportionate amount of the coverage during that period.