A free look period is a duration given to the insurer holders after purchasing an insurance policy. Under this duration, the policyholder can cancel their policy if they want to. When you opt for policy cancellation in the free look period you are entitled to a range of refunds along with premium refunds.
The free-look period applies to all life insurance policies. To opt for a free look period in health insurance policy, a duration of at least 3 years is a must. The free look period is applicable from the policy commencement date of an insurance policy. The insured will be allowed at least 15 days (30 days in case of electronic policies and policies sourced through distance mode) from the date of receipt of the policy to review the terms and conditions of the policy and to return the same if not acceptable.
Purpose of the Free Look Period in Insurance
Under the consumer protection initiatives of IRDAI ( Insurance Regulatory and Development Authority of India), the free look period is a practice in place to safeguard the interests of the policy buyers. Below are the pointers explaining the importance of a free look period.
Consumer Protection
Informed Decision-Making
Prevents Mis-Selling
In today’s time, you can buy various insurance policies at the tip of your fingers. The insurance market has grown over the past decade. Resulting in multiple types of insurance which are available on both online and offline markets.
Given you purchase a health insurance plan (minimum term as 3 years) or a term life plan which are crucial for your life and financial stability. The free look period gives you the option to cease the policy within a stipulated time as per your choice. This empowers the consumers to operate in a free market.
The free look period not only helps you opt out of your current policy, but it also enables a return of premiums and other charges which are paid by you while buying the insurance plan.
Today is the period of Caveat Vendor, buyers need to have the flexibility to make reliable decisions on important financial matters such as insurance. Given this, if you or a buyer feels that another policy is a better fit for yourself and your family, you can inform your current insurer /broker that you want to withdraw your policy and claim your refund under the free look period.
Earlier the insurance was monopolised by many government and big financial institutions. These entities majorly operated on an agent or broker system to propagate their insurance policies, by the one size fits everyone policy. This has led to the majority of Indian families opting for standard insurance products. However, the scenario has changed today.
Indian consumers have a wide range of varieties and consumer awareness to purchase their insurance policies. In such a matter, we may purchase the insurance under the leading works of an agent or any other relatives. After purchasing the policy, it may occur that it's not financially suitable for you, the covers are not appropriate or there are some financial restrictions which make it difficult for you to afford premiums. In this case, you can opt to exit before the free-hold policy period ends.
How Does the Free Look Period Work?
The concept of the free look period is simple, if you don’t like it you can end the policy but with monetary refunds. Below is the working process of the free look period for your reference:
Initiating the Free Look Period
The initiation of the free look period occurs when you have received the hard copy of your policy and the e-purchase of a policy online. The commencement is marked from the date you received the policy over Gmail. Below is a table to guide you regarding the type of policies the free look period is valid for and the number of days.
| Type of Policy | Duration (Standard) |
|---|---|
| Life Insurance | 15 days (30 days if bought online) |
| Health Insurance | 15 days (30 days if bought online) |
| ULIPs | 15 days (30 days if online) |
| General Insurance (e.g. motor, travel) | Usually not applicable unless it's a long-term policy |
Cancellation Process
The cancellation process is simple. You need to contact your broker or the insurer directly within the stipulated time. You can connect over an e-mail or call their customer service number directly to communicate your cancellation and usage of the free look period to claim refunds.
Refund Eligibility
Refund eligibility is majorly based on two things, the cancellation is done within the time frame of the free look period and no claim has been submitted or intimated under the free look period. With these conditions matching the insurance is entitled to pay the refund of the premium paid less any expenses incurred by the insurer on medical examination of the insured persons and the stamp duty charges.
Steps to Cancel Your Insurance Policy During the Free Look Period
Below are the steps to guide you to cancel your insurance policy during the free look period:
Check Eligibility
Contact the Insurer
Submit a Written Request
Submit Required Documents
Refund Processing
Make sure your policy is still within the free look period, which usually ranges from 15 to 30 days from the date you receive the policy documents. Also, confirm that the policy type qualifies for cancellation under this period.
Reach out to your insurance company through customer care, email, or their official website to inform them of your intent to cancel the policy.
Provide a formal written application or complete the insurer’s free look cancellation form. Mention your policy number, cancellation reason, and request for a refund.
Send all necessary documents such as the original policy bond, identity proof, a cancelled cheque, and sometimes a copy of your PAN card to support your cancellation request.
The insurer will deduct applicable charges like stamp duty, medical costs (if any), and pro-rata premiums. The remaining refund is usually processed within 7 to 15 working days.
Refund Process During the Free Look Period
Below is the refund process during the free look period:
Stamp Duty Charges
Cost of Medical Tests
Proportionate Premium for the Coverage Duration
Refund Amount
These charges are fixed amounts paid towards stamp duty while issuing the policy will be deducted from the refund.
If the insurer arranged any pre-policy medical tests, the expenses for those will be deducted from the refund.
The premium for the number of days the policy provided coverage (from issuance to cancellation request) will be calculated and deducted.
After deducting the above charges, the remaining amount is refunded to the policyholder’s original payment method-typically via NEFT or bank transfer—within 7 to 15 working days.
Important Considerations for the Free Look Period
A free look period is a handy feature, which can be very useful depending on various situations and changed scenarios after you buy the policy. A few of the important considerations that you need to take care of are stated below:
Time Limit
Partial Refund
Policy Type
No Claims
The free look period typically ranges from 15 to 30 days, depending on the insurer and policy type. It starts from the date the policyholder receives the physical or digital policy document. Cancellation requests after this period will not qualify for a free look refund.
The insurer will deduct charges such as stamp duty, medical exam costs, and pro-rata premiums for the days covered. Hence, you may not receive the full premium amount you paid initially. It’s advisable to check the refund breakdown with your insurer.
The free look is generally available for life insurance and health insurance policies purchased individually. Group policies or those bought under employer benefit schemes typically do not qualify. Always verify eligibility at the time of purchase.
The policyholder must not have made any claims during the free look period to be eligible for cancellation. Even a small claim may invalidate the refund option. It’s best to initiate cancellation early if you’re unsure about the policy.
Scenarios Where the Free Look Period is Beneficial
The free look period offers policyholders a valuable opportunity to thoroughly review their insurance policy after purchase. It acts as a safety net in case the terms, benefits, or features do not align with their expectations or needs. Below are some scenarios where it might prove beneficial.
The Fine Print Surprise
The Better Deal Dilemma
The Agent Mislead Mishap
After receiving the policy, Raj takes a closer look and finds exclusions he wasn’t informed about with no coverage for pre-existing conditions. Thanks to the free look period, he cancels the policy before it's too late.
Just days after buying a health insurance policy, Anjali comes across another plan offering more coverage at a lower premium. Since she’s still within the free look period, she cancels the original policy and switches to the better option.
Karan trusted his agent’s verbal explanation, only to discover the actual benefits were far fewer than promised. The free look period lets him back out and report the misrepresentation without being financially stuck.
What Happens If You Miss the Free Look Period?
If you miss the free look period, your ability to cancel the insurance policy with a full or partial refund becomes significantly limited. After this window closes (usually 15-30 days), insurers treat any cancellation request as a regular surrender or termination.
This often results in heavier deductions, no refund at all, especially for term insurance policy, or exit penalties, depending on the policy type and tenure. Additionally, you may lose valuable time and benefits, especially if you plan to switch policies. It's always best to review your policy promptly to make an informed decision within the free-look timeframe.
Final Thoughts
As we have been through the working for free time period. It is one of the crucial features which is mandated by the IRDAI in favour of the buyers. Although this feature is available, it is essential to research well and compare multiple options before purchasing a term or health insurance policy. The free look period is more of a responsibility for the consumer to communicate that the purchased policy won’t fit him. Further, it eliminates the exit charges and lost premiums paid and facilitates pay-back to the customer protecting their financial loss.
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Frequently Asked Questions
Can I cancel my health insurance policy after the free look period ends?
Yes, you can cancel your insurance policy after the free look period ends. However, exit charges and other contingent expenses are to be faced by the policyholder.
How long does the refund take after the cancellation?
As per the IRDAI guidelines the refund is to be processed within 15 days of cancellation under the free look period.
Is the Free Look Period available for all types of health insurance?
No, the Free Look Period is typically available only for individual health insurance policies, not for group or employer-provided plans. Further, it is applicable for health insurance policies with a minimum term of 3 years.
Can I cancel the policy while making a claim during the free look period?
No, you cannot cancel the policy while making a claim during the free look period.
How do I request a cancellation?
You can request the cancellation by calling the insurer or the broker on the customer service number and by writing an email for the same.
