Life Insurance: Understanding Free Look Period
Published by Sharekhan Education | April 18, 2021
Life Insurance: Understanding Free Look Period
You have received your life insurance policy document today that’s good. But have you gone through the policy document, read the fine print and understood the terms and conditions? Are the policy features, terms and conditions the same as promised? Does the policy meet your expectations or not?
If yes, then you have taken that step to provide financial security to your family, but if you haven’t yet checked your policy document then that could prove costly. Wrong or unsuitable life insurance can lead to trouble.
When you shop online, don’t you check if the product you receive is the right one or not? Don’t you do a 360 degree check to see if it is brand new and with no defects? Exactly! The point we are trying to make. If it’s routine to check other purchases, why miss doing so for such an important financial decision? You need to check the policy document, read the terms and conditions specially the fine prints and decide for yourself.
Many a times it is seen that what you get is not what you had asked for; so unless you check the policy how will you know that it is the right one?
Now you may feel what if this policy does not meet my requirements; is a wrong policy or I may just not want it? Can I return it? Will I get my moneyback? Will the company refund my money?
All this is possible in the Free Look Period.
Let us quickly understand what the free look period is and how it can prove beneficial.
Free look period is typically a period of 15 days given to the policy holders from the date of receipt of the insurance policy. During this period, policyholders can review and return the policy if unsatisfied with the terms. This facility allows policyholders extra time to review and decide on keeping the policy.
Keep the envelope, delivery receipt, and other documents to confirm the date of receiving the policy for the free look period. To save valuable time and avoid delays, it’s better to approach the insurance company directly yourself and obtain a time-stamped receipt.
Once you return the policy document during the free look period you can expect a refund of your money but not in full. This is because the insurance company deducts charges for proportionate risk premium, stamp duty, medical tests, etc. This refund process is same for all types of life insurance policies. However, ULIP refunds depend on deductions and the Net Asset Value (NAV) at cancellation.
To summarize, we can say that the free look period is a useful facility and can come in handy in case you feel that the policy does not meet your requirements or is not the same as opted for. It is important to thus go through the policy document within the given time frame, read the fine printsand take timely action as required.
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