Free Look Period In Health Insurance Policy: Know Features And Benefits

Robin purchased health insurance under the influence of his best friend. But after purchasing the policy, he checked the clauses mentioned in the documents and found that some of the clauses will not fulfil his requirements. Now, he decided to return the policy and checked some other health insurance plans from different insurers that will satisfy his needs. He can easily return his policy within the free look period. The free look period is the time range when you can return the purchased policy if you are not satisfied with its terms and conditions or clauses.

In this digitalized era, people can now easily purchase and renew health insurance without any hassle. The Insurance Regulatory and Development Authority of India (IRDA) instructed insurance companies to offer free look period insurance to policy buyers to make the purchase decision more convenient and friendly.

What is the Free Look Period?

As per the IRDA’s rules, a policyholder can return the policy within a specific period if he/she is not satisfied with the coverage benefits and terms and conditions of the policy. All kinds of health insurance policies come up with a free look period. Depending on insurance companies, this free look period is between 15 to 30 days. It starts from the day of issuing the policy. If you are not satisfied with the terms and conditions of the policy or the policy is not able to provide you with adequate coverage, then you can cancel your policy within this time duration. The cancellation charges will be minimal, while the rest of the amount will be refunded by the insurer to your account.

The Free Look Period for Health Insurance

Mentioned below are some factors that come up with the free look period for health insurance.

1. Time Limit

While purchasing a health insurance policy, the policyholder can enjoy the benefit of free look cancellation within this stipulated time. The time frame for the free look period is up to 15 days from the date the policy was commenced. After 15 days, the policy will not fall under the free look period.

2. Cancellation Request

If you are not satisfied with your purchased policy and want to discard it as per the free look period option, you should get in touch with your insurance provider and submit a cancellation request. Based on the insurance company’s capabilities, you can submit this request either online or offline.

3. Submission of Details

While initiating a cancellation request, you need to submit the below-mentioned details.

• Date when you received the documents of the policy
• Reasons for policy cancellation
• Bank account details to transfer the money
• Details of the facilitator if you purchase the policy through an agent

4. Documentation for Policy Cancellation

To cancel your policy, you must submit some imperative original documents or copies of the documents. These documents could be the premium paid receipt, canceled cheque, etc. If you can’t submit these required documents, the insurance company may ask you to submit an Indemnity Bond.

5. Refund

At any cost, you may not receive the entire refund amount on policy cancellation. The insurance company will deduct some amount such as Stamp Duty Charges, Medical Test fees, etc. and then reimburses your payment. After evaluating all the terms and conditions related to the free look period, the refund amount will be initiated.

Some of the Benefits of a Free Look Period

Many people often ignore the policy’s terms and conditions while purchasing health insurance policies for them. They just consider the features and benefits mentioned on the brochure or a website. They came to know about certain terms and conditions while initiating claims for their diseases. But it was too late by then.

The prime benefit of the free look period is the advantage of returning the policy with minimal penalty cost. The 15-day time frame could be sufficient to check the policy’s coverage and benefits that you may not check before buying the policy.

Now, due to this option, you can return your policy without losing much amount. You don’t need to continue a policy that can’t fulfil your requirements. So, it’s better to return the policy and get a refund from the insurer.

How Does the Free Look Period Work in Health Insurance?

Choose a policy that offers you a free look period option. This means you need to buy a health insurance plan for the long term. A policy that offers coverage for three years comes up with a free look option.

You should return the policy within the calculated time frame i.e., 15 days in most cases.

Let’s understand the working principle of the free look period.

Mr. Avinash purchased a health insurance policy for three years from a reputed company. He was in a hurry at the time of purchase; hence he forgot to check the room rental clause. According to the clause, the insurer will offer a restricted amount for the room rent in case of hospitalization. This was not accepted by Mr. Avinash and thus, he utilized the advantage of the free look period and returned the policy to the insurer. He selected another policy from a different insurer that didn’t have any restrictions on hospital room rent. So, Mr. Avinash discarded his previous policy and purchased the new one.

In absence of a free look period, Mr. Avinash didn’t get a refund from the insurer. He needs to continue the policy for three years with the room rent clause.

The Procedure to Cancel Your Policy Within the Free-Look Period

Step 1

Check whether you are meeting all the criteria (minimum 3 years policy purchase and policy cancellation within 15 days) or not

Step 2 

Mentioning the reasons for cancellation, submit the cancellation request via email within the free look period. You can discuss with the insurer the cancellation process

Step 3 

Submit all essential documents

Step 4 

The insurer will evaluate your application

Step 5

Once the verification will be completed, the insurer will acknowledge it and refund the money as applicable

Conclusion

While purchasing a policy, always read the documents cautiously and then, make a prudent decision. If you think you need to change your decision, then utilize the free look period and cancel your insurance anytime within the stipulated time.