Free Look Period in Health Insurance

What is the Free-look Period? - In health insurance, the free-look period refers to a specified amount of time or a window within which the policyholders can terminate their chosen policy if they are not satisfied with it. In this period, no penalty fee is applicable for the policyholders for the cancellation. Generally, a free-look period lasts for 15-30 days and allows a policyholder to decide whether they want to keep their policy or not. This period may vary according to the terms and conditions of different insurance providers.

The regulatory guidelines have prescribed the process to avail the option of a free-look period, making it a transparent and standard process. For instance, policyholders can use this facility within 15 days of receiving the policy document, if the policy is bought offline. For policies that are bought online, then the free-look period increases and is for 30 days of receiving the policy document.

If a policyholder doesn’t like a policy, he/she needs to inform the company by writing to them, the communication cannot be oral. Experts say at times just informing the insurance intermediary also might not be enough and the free-look window could close by the time the company gets to know. Hence, it is better to communicate with the company in writing.

To get your refund from the insurance company, firstly see if your policy falls under the applicable category. Then after letting your insurance company know your intent to use the provision of a free-look period in the prescribed process, you will be eligible to get the refund of the premium paid by you.

How Does a Free-Look Period Work?

The free-look period starts typically when the annuity policy gets delivered to you. A few of them will require you to sign a delivery receipt, but your clock will start as soon as you receive the policy. Also known as the free examination period, you can now understand or review the policy's terms and conditions carefully and thoroughly.

The days that get counted in a free-look period are the calendar days, not the business days. This means that Saturdays and Sundays do get included in your free-look period. During this period, a policy purchaser can even inquire to the insurer regarding any policy doubts. And if you're not satisfied after reviewing the terms and conditions, you can ultimately cancel the insurance policy.

It is essential to note here that a free-look period is only available in the policies that have a term of at least three years in health policies. Other short term insurance plans in the health sector do come with the provision of a free-look period. This is as per the rules and guidelines of IRDA.

What Are the Benefits of a Free-Look Period in Health Insurance?

There are various benefits of a free-look period. A few of them include:

• The main benefit of a free-look period is the additional time it provides to policyholders, thus enabling a policyholder to review each term and condition of the policy they bought.
• If a policyholder does not like specific terms or conditions of the policy, he/she can terminate it within the free-look period to avoid an additional maintenance fee.
• Within this free-look period, you can also get a refund of a few of the premiums paid while buying a long term insurance plan.
• One of the best features of a look free period is that you don't have to provide a necessary explanation as to why you want to cancel the policy. This can vary depending on the various insurance companies, but the customer service will not try to talk you out of cancellation. As long as you're following the time frame rules, you will get your money.
• A free-look period especially allows a policyholder to ensure that he/she wants to dedicate a part of their cash to cover administrative costs regularly.

How Can You Make The Most of Your Health Insurance Free-Look Period?

While there are many advantages of a free-look period, you must be aware of several other factors. These factors will help you to receive all the essential benefits provided by a free-look period. Some of them include:

• Give Your Correct Details On The Form

When you purchase a long term insurance plan, remember to fill in the correct details of your address and contact number. This will ensure that you can explicitly listen to your plan's features and details during the mandatory welcome call.

• Take The Appropriate Time To Review The Policy

Generally, a policyholder has 15 days to understand all the details and conditions of the policy. Make efficient use of this time to look through the terms, communicate with your company agent, and make sure that you want to keep the policy.

• Save The End Date Of Your Trial Period In Advance

Keep track of the start and end date of your free-look period. As soon as you receive the policy, your trial period will begin. Also, before you sign the receipt, always check the date. This is to ensure that you do not sign on a back-dated receipt. This can cut your 15-day free period and make you miss your cancellation period.

• Properly Communicate With Your Insurer

If you have an issue with your policy, you need to communicate it in a written manner instead of oral communication. It is better to communicate in writing to a company, so they get a formal note from your side. At times, a few agents try to delay your side of information to end the free-look period. In that case, you need to visit your insurer's office to submit a policy's cancellation.

• Do Not Expect A Full Refund Of Your Premiums

Even if you cancel your long term insurance plan within a free-look period, it is liable to expenses on stamp duty and medical tests. If the risk-cover service of your policy has already come into effect, an insurer can deduct the risk premium before cancelling your policy.

Can You Cancel A Policy During A Free-Look Period?

Yes, you can certainly terminate your policy plans if they do not match the requirements of your long-term insurance strategies. Solely designed for your benefits, a free-look period serves the purpose of helping you decide whether you want the policy or not. To cancel a health insurance plan, you need to convey this message to your insurance provider. Once you do this, your agent will usually provide you with a few alternate options that can suit you. However, if you still do not wish to keep the policy, you can end it by filling up the cancellation form from the bank's official website or the bank's branch office.

Once the cancellation form is submitted to the bank, it will take a few days to process your request. Before you put in a cancellation request, make sure that you have the necessary details given below:

• The date on which you received the official policy documents.
• Complete contact information of the agent (if you have purchased the policy through an agent).
• Reason for the cancellation of the long term insurance plan (if applicable).
• A valid bank account to finally receive the refund.

It is also essential to note that only cancellation is allowed during a free-look period in health insurance policies. If you want to port the policy, you have to wait for the time of renewal. When it comes to refunding the premiums, an insurer can deduct a few expenses to compensate for the company's charges. Therefore, a buyer must know the features and refund services before purchasing the policy or paying regular amounts to retain the chosen policy.

What Is The Duration Of A Free-Look Period?

The general term of a free-look period is usually 15 days. In the case of policies bought online, free-look periods can extend up to 30 days after receiving the policy documents. A few of the banks also provide extra free-look periods for senior citizens. If a policyholder wishes to terminate the policy during this period, he/she has to take care of all the necessary documentation before filling the final cancellation plan.

Long term insurance plans can have a wide variety of benefits for people. But, to ensure that you are thoroughly satisfied with your policies, you have to make the most of your free-look period. Comprehend the terms and conditions of your chosen policy correctly, and communicate with your insurer if you have doubts. Also, always remember that you need to submit the original documents of premium receipts, cancelled cheques, etc. If the documents are not available, an Indemnity bond can also serve the same purpose.

A noteworthy point to keep in mind is that while it is possible to own multiple health insurance policies, it is more convenient to wait for the current policy to cancel before looking out for other options. If you apply for another policy at a new insurer, they may think you are trying to purchase more insurance policies than you need, thus declining your application. No amount of refunds will be made if you cancel your policy after the free-look period.