Check Your Insurance Policy Properly During Free Look Period.

In life insurance, free-look period is the time period during which one can analyze the policy and also make any changes required or even cancel it without any additional costs.  Typically, a free-look period is for 15 days and applicable post receipt of the policy documents. During the 15-day period, you can make changes to the policy without any additional cost. Also, if you plan to cancel the policy within this period you will be refunded the entire amount less the premium for the 15-day period and any charges for this period on a pro rata basis.

However, this free-look can be exercised only when one writes to the insurance company specifically requesting for this. In order to avail this option a form needs to be filled out to. Keep in mind that the individual has to prove the date of receipt of the policy, and the insurer has the right to reject or accept this.

Also, one needs to provide other details along with this form, such as details of change / reason for cancellation, name of agent, policy details, original policy document, indemnity bond, cancelled cheque leaf and premium receipt. An important point to note is that the free-look period of the policy starts from the date of receipt of the policy, and this makes it very important to keep the envelope (with the date seal) to prove when you received the documents.

It is also advisable to write directly to the insurance company and speak to them to cancel the policy during the free look period, since agents can hold on to the documents on some pretext to ensure that you do not cancel the policy within the mandated 15-day period. In the case of unit-linked insurance plans (Ulips), there could be a loss in the investment due to NAV fluctuation, as they will refund the money (less expenses) based on the NAV on the day you apply for a refund.

In order to make the most of the free look in period, ensure that you are not under-insured and rectify this (if this is indeed the case). While choosing a life cover there are several aspects to consider, especially while deciding the sum assured. Apart from the usual ball park of 10 times one’s annual income, there are various other factors to be considered. One should first and foremost take into account their situation in life with regard to dependents, the more the dependents (include plans to have children) the higher sum assured required, as this money has to be used by your family in case of any eventuality. So whatever insurance you are planning to avail, consider this along with your present family scenario and your expected future family scenario.

Also, take this time to read all the ‘small print’ and ensure that the policy is to your requirements. Choosing an insurance policy which offers lower premium payment may not be the best option, as while settling claims there may be many things that are mentioned in the small print and excluded from the cover. Ideally, don’t compare only the insurance premium paid from various insurance providers but also compare their claim settlement reviews and the details of the cover (what is included and what is not). It is advisable for individuals to opt for a company that has a good track record of settling claims.

What it it?

* Typically, a free-look period is for 15 days and applicable post receipt of the policy documents. In that time, you can make changes to the policy without additional cost
* If you plan to cancel the policy within this period you will be refunded the entire amount less the premium for the 15-day period and any charges for this period on a pro rata basis
* The free-look can be exercised only when one writes to the insurance company specifically requesting for it
* An important point to note is that the free-look period of the policy starts from the date of receipt of the policy, and this makes it very important to keep the envelope (with the date seal) to prove when you received the documents