Know everything about how to cancel your life insurance policy during the free-look period

If you want to protect your family from financial troubles, then you should consider picking a life insurance plan that will cater to your financial needs.  Life insurance plans involve different types and detailed research on them before investing money is wise. As a policy buyer, you should try to find out more about the features and details from various sources before investing money. Having the right type of plan allows you to get the best coverage that fits your life and family’s needs. 

Having said that, we do realize that it is not always possible to know all the features and nuisances of the policy at the time of purchase. Lack of information and at times misselling might end up with you buying a policy that doesn’t suit your financial needs. In such a scenario; reading and understanding the insurance policy in detail including all the terms and conditions can be very beneficial. It can help you make the right decision before investing money into something that aids you to accomplish goals effectively. Hence the need for the ‘Free look Period’.

What is a free look period?

A free look period is a period available to the policy buyer after receiving the policy to go through an insurance document in detail. These details entail all information related to the policy including the benefits, features, terms, and conditions. This allows the policy buyer to evaluate the features and other details properly allowing you to terminate a policy as soon as possible in case you are not satisfied. The facility is valid for 15 days which is extended to 30 days in case of an online or distant marketing purchase. If you feel that you have purchased the wrong plan, then you can use this feature to terminate the insurance policy immediately. Furthermore, you can get a refund for the paid premiums after canceling your plan. The refund amount however will abide by the life insurance cancellation rules and refund policy of the insurer.

As a policy buyer, you have the right to ask questions to the insurer when you have any doubts regarding coverage. If you are satisfied with the policy, then you can continue the policy. When you are not satisfied with the coverage, you can terminate the same as soon as possible within the free look period. 

Guidelines to cancel your policy during a free look period

The Freelook Period is for a minimum of 15 days and in the case of electronic and distant marketing policies, it may extend to 30 days. Use this period to review your policy and in case you wish to cancel the insurance policy the following guidelines will be helpful –

1. Send a requisition to your insurer: The first step is that you have to send a requisition to your insurer after receiving your policy document. You need to fill in a requisition form for the cancellation of the policy. Although many insurers provide the option to submit the form online, it is wise for you to submit the hard copy of the duly filled form at the nearest insurance office with mandatory details. Some of them include policy details, the date of policy documents that you have received from the insurer, reasons for terminating your policy, etc.
2. Response from the company for requisition: Your insurer will contact you after receiving the cancellation requisition form. You should tell the valid reason for the termination and your insurance company will offer solutions for the problems. When you are not satisfied with the answers, then you can proceed with the cancellation process.
3. Refund of Premiums: Your insurance company will transfer the refund amount after processing your cancellation form. It will deposit the refund amount directly to your bank account or settle the amount in the form of a cheque. Keep in mind that you won’t receive a complete refund. This is because your insurer may deduct some charges while refunding your amount. Some of them include stamp duty costs, proportionate risk premium, and medical examination costs incurred by the insurer. Read through and understand the insurance refund policy from different sources before you proceed to terminate a policy.
4. Know more about ULIP refunds: If you have purchased a ULIP insurance policy, then the refund may vary when compared to a standard plan. Your insurer will calculate the net refund amount based on the prevailing market price and other factors. When the market is good, then you may get an additional amount during the cancellation process.

How long will it take for you to get the refunds?

The time taken to receive the refunds will depend on your mode of application and other factors. It will take nearly 7-10 days to get your refund. 

What are the benefits of a free look period?

• A free look period insurance allows you to take some additional time to review your policy document in detail.
• Allows you to decide whether you want to continue a policy or not.
• Get a refund after terminating your insurance policy.
• Enables you to save money on administration charges and other expenses.
• Option to cancel insurance policy within the time limit.

What are the details needed for your policy cancellation?

• You should mention the date of your policy document after receiving it from an insurance company.
• Your contact number and email id.
• Bank details.
• Reasons for the cancellation of your policy.

Why do you need a free look period?

A free look period life insurance allows you to understand the features including terms and conditions. As a policy buyer, it is a powerful tool in your hands that allows you to terminate your policy when you are not satisfied with it. It reduces the possibility of you becoming a victim of misselling. 

Conclusion

Buying new life insurance involves several challenges and you need to evaluate the details properly. You should also know how to cancel an insurance policy in case you are not satisfied with the features and benefits of the policy. Although life insurance allows you to ensure financial protection, you should know the terms used in a plan. This, in turn, gives ways to invest your money wisely while buying an insurance plan from the market to avoid unwanted problems and stress.