Term of the week: Free-look period

 

Free-look period is a time frame within which the new policyholder can return his policy to the insurance company without paying any penalties. As per the regulations of IRDA — the insurance regulator in India — all insurance companies must provide provisions and requisite time for the policyholder, if dissatisfied, to return the policy and get refund.

The free look-up period is usually 15 days (30 days in case of online policies). This is applicable to both life and general insurance policies. If a customer wishes to cancel the policy, he/she should request for the same to the insurer in writing. The premium will be refunded after deducting (if any) proportionate risk premium for the coverage period, stamp duty charges and any expenses borne towards medical examinations. The insurance company may call to resolve the issue for termination of policy, but they cannot force you to stay with the policy.

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