Everything You Need to Know About Free-look Period

Rajesh has recently bought a new health insurance policy and received the policy document. But, he is disappointed because the terms and conditions are not what he was looking for.

Also, the coverage under the policy is not serving his purpose.

He is not pleased with the policy; feeling that something is not as good as it should be.

What will he do now? He has already paid the premium.

Does he have to bear it?

The answer is ‘no.’

Rajesh has the right to cancel the policy if he’s not satisfied with it.

Let me tell you that there is a provision called ‘Free-Look Period’ as per the IRDAI. This provision allows you to terminate a policy if it is not suitable for you. Yes, cancelling a policy within a specific time period is possible.

Let’s dig out a wealth of crucial information about the ‘Free Look Period’ and discuss how it can help you.

What’s Free-Look Period?

Free-look period formulated by Insurance Regulatory and Development Authority of India (IRDAI) is a consumer-friendly provision that enables policyholders to terminate the policy without penalties, such as surrender charges.

The tenure of the Free-look Period is 15 days. However, insurance companies can extend it to a maximum of 30 days. This provision comes with every indemnity cover or defined plans.

With this option in hand, you have the right to return the policy and get a refund if you realized the policy you have bought is not right for you.

However, there are some conditions.

• This applies only to Life and Health insurance policies
• The health insurance should be for a duration of a minimum of 3 years
• The option should be exercised within 15 days of receiving the policy document
• The policyholder should communicate it to the insurer in writing

Hence, if Rajesh wishes to return the policy, he can do. And the insurance company will refund him the paid premiums after making certain deduction.

Also, read about the Exclusions and Waiting Period.

Here are some more conditions. knowing them is essential. Let’s discuss.

Time Limit: The time limit to avail the benefits of the free look period is 15 days from the date of receiving the policy document. If you wish to return the policy, you need to prove the starting date of the policy.

Request for Cancellation: To avail free look benefits, you need to submit a request in writing. Some insurers also allow policy buyers to raise the cancellation request by filling an online form from their official website.

Furnishing of Details: To cancel the policy within a specified free look in period, you need to provide certain details:

• The date on which the policy document is received by you
• Information of the agent in case the policy is purchased through an agent
• Reason for the cancellation of the policy, etc.
• A valid bank account to receive the refund

To get the list of required things, call InsuranceDekho or take help from a customer care executive of the insurer.

Documentation for Cancellation: To complete the cancellation process, you’ll have to submit the original documents, which may include premium receipt, a cancelled cheque. If the documents are not available, an Indemnity Bond can serve the purpose.

Not Full Refund: While cancelling the policy, you shouldn’t expect a full refund. The insurer refunds the premiums after adjusting the premiums for:

• Stamp Duty Charges
• Expenses borne by the insurer in conducting the medical test
• The proportionate risk premium for the coverage period

Step-by-Step Guide

Below are the step-by-step guides to cancel your insurance policy within the free-look period.  

• Read the policy document as soon as you receive it
• Contact the customer care executives if you have any doubt
• If not satisfied, write to the insurer. Request for cancelling the policy
• Approach the broker through which you have bought the policy  
• The insurer will send an endorsement and refund the premium

It’s worth remembering that only cancellation of the policy is allowed within the free-look period, not portability. You can port the policy only at the time of renewal.

Conditions

As far as health insurance is concerned, the insurance companies bear up to 50% of the expenses incurred towards medical tests that are renewed on a yearly basis. When it comes to refunding the premiums, the insurer deducts this amount.

Also Read

Health Insurance: The Age to Buy and The Cover Amount You Will Need

Best Senior Citizen Health Insurance Plans in India

Final Words

The IRDAI has designed the Free-look Period with an aim to serve customers. But, to reap its benefits during the hour of need, you need to know how it works and how you can go with the process.

Let InsuranceDekho help you find the most suitable health insurance policy for you and your family. With our help, you don’t have to worry about choosing the best policy, cancellation procedure, claim procedure or even portability procedure.