Life insurance is one such important tool that provides much needed finances for your family, even when you are not there to take care of them. However, the Insurance Agent
might not have given you the right guidance and you find that many of the features you were looking for are missing. You may then have a change of heart and decide to cancel the policy. Insurance companies provide you the option to do this and you can do it for free for a certain period of time after purchasing the insurance policy. This period when you can end the Policy
contract without surrender charges and other penalties is called the ‘free look period’.
What is Free Look Period
The Free look period
typically lasts around 15 days and is applicable for life and health policies. During this period you can have a careful look at the policy again and decide to continue with it or not. You will receive a full refund if you decide to cancel the policy contract for any reason during this period. The following are two common situations when the free look period facility can come to your rescue:
In case you have handed over the cheque for the Premium
etc. but later find that it is a different policy that has been given to you and not what was initially offered.
In case the policy offered to you doesn’t have all the features that were initially mentioned, even then it is a case of incorrect policy being given to you.How to Use the Free Look Period
In case you wish to use the facility and return your policy, you need to follow the correct procedure. Different insurers follow different procedures, so you must know the correct one in your case. Here are a few steps you must follow:
It is best to visit or contact the customer service department of the Insurer
in person and not to depend on an agent.
Agents are likely to employ all kinds of delaying tactics to avoid cancellation of the insurance policy.
Some insurers insist on going through their call center, in that case you must first inform their call center.
You will have to fill a cancellation form and submit it along with the original policy documents.
You must be very careful to keep note of the date of purchase of the policy, policy forms etc.
Do keep the acknowledgement etc. carefully to avoid any legal or non-legal problems in future.
Send the required forms in advance keeping in mind that there could be postal delays too.What are the Deductions
In case you opt for free look period withdrawal, your policy is cancelled and the premium is paid back to you. However, following are a few deductions that you must be aware of:
Stamp duty and other administrative and service costs
Charges borne by the insurer for your medical tests
Mortality charges for the period your policy was active
Availability of the free look option does not mean that you can be absent minded and relaxed at the time of product selection. You must do thorough research, compare life insurance
, seek expert advice and then get the best life insurance. Otherwise, it is meaningless wasting your precious time going after a free look claim.