Defining Free Look Period in Insurance
The modern lifestyle is undergoing a lot of changes that are impacting a person’s life in many ways. Unexpected events such as critical illnesses, death, accidents, and disabilities have a huge financial impact on the family. Therefore, it is imperative that each of us buys an insurance plan to provide ourselves and our family a financial security net. Since insurance policies involve different types, customers should evaluate them minutely before going ahead with the purchase. While buying a new insurance plan, customers should analyse the pros and cons to get the best fit that would meet their financial planning needs.
At times it is not always possible to comprehend the actual benefits and terms of the insurance policy at the time of buying, thus the ‘Free Look Period’ offered by insurance companies is very beneficial.
What is Free Look Period in Insurance Policy?
A free look period is a facility meant for policy buyers to review a policy properly after buying it from an insurer. It provides ways to terminate a plan when a person is not satisfied with the benefits or any other thing. Since the duration is only 15 days from the date of receipt of the policy, one should make an immediate decision when it comes to policy termination.
How does a free look period work?
An insurance policy is an agreement between an insurer and an insured person for a certain period. It is mandatory for insurers to explain the details and benefits of a policy to customers while purchasing a policy. The free look period allows the policy buyer to evaluate a policy document after receiving it from an insurer. If the policy buyer feels that the terms and conditions of a plan are not in line with their requirement he/she can cancel the policy before the lapse of the free look period.
Things to know more about the free look period in an insurance plan
Policy buyers should have the following information about the free look period to be able to take the right decision in terms of policy buying-
- All life insurance policies come with the free look period feature irrespective of the age
- A policyholder should submit a request in writing when he/she wants to terminate a plan during the period and for which they can download a form from the insurer’s website
- It is important for a policyholder to submit certain documents including an insurance policy document, premium receipt, etc.
- Policyholders will receive a refund of the premiums paid after submitting the required documents.
- The refund calculation will differ when it comes to a Unit-linked insurance plan (ULIP)
Tips to make the most out of Free Look Period
Here are a few tips that can be insightful if you as a policyholder want to use the free look period to your advantage:
- Giving correct details on the form: When buying an insurance plan, one should provide the correct details on the form that will help to get answers to certain questions. Moreover, it allows a person to listen to a plan’s features and details while getting a call from an insurer.
- Taking appropriate time to review a policy: A policyholder should take the appropriate time to review an insurance policy to understand the terms and conditions. This will help in knowing the suitability of the policy.
- Tracking the trial period in advance: As soon as a policyholder receives a document, the trial period begins and he/she should check the date immediately. It is wise not to sign on a back-dated receipt. This is because it can cut the 15-day free period that leads to various problems while terminating a policy.
- Communicating properly to an insurer: Policyholders should communicate properly to an insurer within 15 days if they want to cancel an insurance policy. Sometimes, agents may delay the details to end the period that will lead to various problems. In such cases, they should visit an insurer’s office to submit an application form.
- Not expecting a full refund of premiums: An insurer will deduct some amount when terminating a policy and one should keep this factor in mind.
Knowing the guidelines to cancel a policy within the free-look period
A policyholder should know how to cancel an insurance policy from different sources that will make the process a simple one. The first thing is that he/she read the policy document carefully after receiving a fine print. In the next step, a policyholder should contact the customer care team of the concerned company to inform them that he/she wants to terminate a policy.
He/she can even contact the agent or broker from where they have bought the insurance plan. An insurer will issue an endorsement along and refund the amount within 7 working days. It is best to get apprised about the insurance refund policy during the cancellation process. This, in turn, gives ways to overcome unwanted issues effectively to ensure peace of mind.
Why should policy buyers consider a free look period?
Buying a new insurance policy involves several factors and a free look period allows a person to understand the purpose properly. Furthermore, it provides methods to assess the policy coverage and other details. Another thing is that it enables a policyholder to focus more on financial goals which help immensely in making financial plans. A policy buyer should check whether a document contains all information after gathering it from an insurance company. Above all, he/she can decide whether a plan will suit his /her needs or otherwise.
Conclusion:
Insurance is a one-time investment and policy buyers should know how it will benefit their families during emergencies. The free look period life insurance makes feasible ways to determine whether to buy an insurance plan or not. However, it is important to understand how to utilize the same wisely. While purchasing a plan, people should compare the terms and conditions because they may differ from one insurer to another. Financial planning need not be daunting if you do a little research on the investment options available and how best they match your needs.
