What is Free Look Period?

The free look period is the period given to a policyholder to assess and review the policy document. You can terminate the policy during the free look period if you are not satisfied with its inclusion and exclusion terms which you were told at the time of purchase.

You can think of a free look period as a consumer-friendly provision formulated by Insurance Regulatory and Development Authority of India (IRDAI), allowing you to terminate a policy without penalty, such as surrender charge.

A free look period is defined by the regulator. It thus, allow you to decide whether or not to keep the policy for the time ahead.

You should also know that the free look period applies to both life insurance and health insurance policies. However, the related rules differ for each of these types of insurance policies. Hence, it is crucial to understand these differences before you buy any insurance policy.

Let us understand the concept of free look period with the help of an example –

Mr. Mehra recently bought a health insurance policy online and received the related documents in person. While going through its detailed terms and conditions, he found the policy does not fulfil his specific needs.

He does not like the policy, feeling it is not as good as expected. Since he has already paid the premium, what can he do now? Does he have to bear with the policy clauses that he does not like?

The answer to all such doubts is ‘No,’ as there is a free look period covering such instances.

Buy insurance policies can become confusing to many, especially those who do not know much about how insurance policies work. In most cases, people receive actual insurance contracts after paying the premium.

It is nearly impossible for you to review the actual insurance contract language without a free look period. Here, the purpose of a free look period in insurance is to provide you enough time to assess the policy wordings before you commit to paying the premiums.

Home inspection before purchase is a good analogy to understand free look period. To buy insurance without a free look period is like buying a new home without inspecting it beforehand. Although the insurers outline every benefit and limitations of an insurance policy, you can only check the finer nuances once you receive the physical policy document.

Although India's insurance industry follows a highly ethical approach in this regard, you, as a policy buyer, have a right to review the insurance contract before making a final decision. The free look period gives you the time you need for policy assessment.

In reality, many people trust the local insurance agents blindly and opt for an insurance policy they suggest without going into the details. In some cases, the insurance agents may try to convince people to buy an insurance policy that does not fit their needs well.

You should also consider free look period to get some ‘cool-off’ time away from an insurance agent or financial advisor. It is the time when you can look into the details of the policy from your perspective.

At Max Life Insurance, we educate the policy buyers first to help them choose the best insurance policy that matches their financial needs and life goals. By putting valuable information in their hands, we help them avoid the policy purchase's stress, thus ensuring utmost satisfaction. You can check the insurance premium online using our life insurance premium calculators.