A free look period in Insurance policy is a 15 days’ time allocated to the insured where he enjoys full coverage and can review the policy details, clarify its terms and conditions, and in case finds that the product does not suit the requirements can cancel the contact and receive a full refund of the premiums paid.
In Today’s time customer satisfactions plays a major role across all Industries and the same applies to Insurance products as well. Insurance products are intangible in nature hence you cannot fell the product. Thus it makes it mandatory to do through the policy document once it is received. Read the following information:
1. Total Premium to be Paid annually
2. Sum Assured( Insurance coverage)
3. Term of Premium Payment( How many years the premium needs to be paid)
4. Duration of the policy( Maturity Date)
5. Check the Nominee details
We at Insurance Samadhan receives lot of cases of mis-selling and frauds and in most cases the customer was not aware of the free-look period or was misguided of the free-look period by the seller. Please note that the Free-look period begins from the day you receive the policy, hence please keep the envelope in which the policy was delivered safe. If the agent delivers the policy, please sign the receiving with date.
You can cancel the policy if you suspect a fraud or mis-selling or the policy is not as per your needs.
How to proceed with free-look cancelation?
1. Keep the proof of Receiving
The envelope of the policy should be retained as the free look begins from the day policy is received. In case you have signed receiving keep a copy with you
2. Cancel Policy in writing
The cancellation process of policy requires a written application from the policy holder before the end of 15 days free-look period, along with the other details such as receipt date of policy documents and reasons for cancellation. Many insurers have prescribed format of application which can be downloaded from their websites. Please do not rely on your agent for cancellation as if it’s delayed the refund will not be processed. Please write from your registered mail Id mentioned on the policy document to the customer service of the Insurance Company. The details of the customer service is available in the policy and website of the Insurer.
3. Termination Charges
Do not expect full refund of your premium even if you cancel the policy in free-look period. The insurer deducts certain expenses incurred on medical test, stamp duty, admin charges etc. If the risk cover has already commenced, the proportionate risk premium for the period will also be adjusted with your refund amount.
5. ULIPs cancellation process
Unit Linked Insurance Policy (ULIPs) cancellation is done, by the insurer repurchasing the units allotted to the policy holder at the NAV on the day of cancellation of the policy. Suppose your premium was Rs.100, you insurer incurred expenses of Rs.20 and invested remaining Rs.80 in the fund option. On the day of cancellation the NAV has soared to Rs.90. Now the insurer will refund Rs.90 after adjusting charges towards stamp duty, medical test etc.