Insurance is a very important part of the social security of an individual and his/her family. There are different types of insurance and the utmost importance amongst those are health insurance, and life insurance.
Both of these insurance protects the policyholder from any financial burden which may arise due to medical needs. The cost of healthcare is rapidly increasing and any small procedure or test can be a burden on your pocket hence, getting insurance is necessary.
While searching for a good insurance policy, you may need to research a lot and find the one that best suits you. But what if the insurance that you bought is not what you thought it would be?
In that case, you’ll either have to withdraw the policy or stop the policy payments in which case, the amount that you gave will be provided after deduction of some penalty fee.
This is the reason why a free look-up period is provided by every insurance company which enables the policyholder to return the policy to the company in case he/she doesn’t like the insurance without paying the penalty.
In this article, we will decipher the free look-up period, how the free look-up period works, use examples to try to understand about free look-up period, and much more.
What is the Free Look-Up Period?
A free Look-Up Period is a period during which the insurance policy is valid and yet the policyholder can step down from subscribing to the policy without paying a penalty to do so.
In simpler terms, if you do not like the policy then you still have time to return the policy and get your initial payment with a deduction of any policy termination fee like surrender fee, etc.
This period is provided to ensure that adequate time is provided in case the policyholder does not like the policy after purchasing it.
As per IRDAI, a free look period of 15 days (30 days for online purchases) should be provided in case the policyholder does not like the policy after purchasing it Then they can simply cancel the policy citing the reason.
How Does Free Look-Up Period Work?
The free look-up period usually consists of 15-30 days depending on the insurer. It is a period during which you can continue to ask the insurer about the policy and better understand the policy. If you still do not like the policy, you can simply ask the insurer to return the payment that you’ve made so far by citing the reason.
The free look-up period buys additional time for the policyholder in case he/she does not agree with some terms and conditions. The procedure of the free look-up period is simple, in case you want to return the policy during the free look-up period, all you have to do is ask your agent or company representative to return the policy and the procedure will be done. Within a few working days, your premium which you’ve paid so far will be returned to you.
Free Look-Up Period Explained with an Example
To better understand let’s take an example- Ram purchases a policy called LIC Jeevan Saral and upon purchase asks his lawyer friend to review the document. He is now advised by his layer friend that the policy may not be suitable for you and you can have a better policy from some other insurer, and Ram agrees. In this case, Ram has to call his agent or LIC customer care and demand to cancel the policy.
Ram must withdraw from the policy during the free look-up period to ensure he gets all the premiums paid to date back. If Ram fails to adhere to the free look-up period then his policy can still be canceled however, a penalty will be charged.
FAQ
Your insurer or insurance agent cannot say no to your demand for the cancelation of the policy, In case he/she still insists on the policy then you can directly call or email the company for cancellation of the policy and you can take action against your insurer or insurance agent.
The free look-up period is around 15 days for a physical policy sold and 30 days are provided in case the policy is an online policy.
The free look-up period is a period during which the policyholder can cancel his policy without having to pay any penalties for that. It is provided for the benefit of the policyholder and empowers the policyholder to choose the best policy that suits him/her.
No, the grace period and Free Look-up period are not the same. A free Look-up period is provided to the policyholder in case he/she does not like the policy and can cancel the policy during this period without having to pay any penalties.
The grace period is the time during which the policyholder who has not paid his premiums still has the time of 15-30 days (Depending on the policy) to pay the premium. During this time, the policy will still be in effect and will cover the individual.
