1. Every policyholder is allowed a free-look period of 15 days to go through the terms and conditions of an insurance policy, and reverse the decision to buy it if it is found to be unsuitable.
2. During this free-look period, policyholder can choose to cancel the policy, change to another policy or alter the features selected in a policy.
3. It is mandatory for insurance companies to offer the facility, although they can offer products with longer free-look periods too.
4. This period starts from the day that the policyholder receives the policy, and not the date of issue of the policy, and the onus of providing proof of receipt date is on him.
5. Used wisely, this period can enable you to discuss unsatisfactory clauses and exclusions with the insurer for getting the changes made, thus, acting as a sturdy shield against mis-selling by agents.
6. In case a customer wants to cancel an insurance policy during this period, he should call customer service department of the insurance company and understand the cancellation process.
7. Usually, the customer will be required to send the original documents of the policy and a written application form for its cancellation to the customer service department, or to the local branch of the insurance company.
8. It is important to send these documents so that they must reach the company before the end of the free-look period, that is, within 15 days of the receipt of the policy from the insurer, if the customer wants to avail the cancellation option.
9. If the policy is cancelled during the free-look period, the premium paid is refunded after the following deductions:
a) Cost pertaining to medical tests, if any
b) Stamp duty
c) Proportionate risk premium (mortality charges) for the period between issuance and cancellation
d) Service charges.
10. In the case of a Ulip, the company will repurchase the units and refund the fund value, but any increase or decrease in the Net Asset Value (NAV) during the free-look period is borne by the customer, through additions to or deductions from the premium.
11. Use the 15-day free-look period to study the policy and return it, if it does not mention the promised benefits discussed with you.
12. The proposal form copy comes with policy document, both should be vetted, and policy cancelled:-
a) if discrepancy exists between them,b) if you do not agree with the terms,
c) if you believe you were not given full and correct information while buying it, and
d) if it doesn't mention promised benefits discussed with you.
13. If policy is ported, there may not be a free-look period in new insurer's policy.