How Does Free Look and Grace Periods Work in Group Insurance Plans?
Free look and grace period are two important aspects of group health insurance. These terms work in favour of the policyholder. The free look period in group health insurance grants flexibility to the policyholder to review the terms and conditions of group health policy. At the same time, the grace period in group health insurance policy grants some time to the policyholder in order to renew the policy.Read more
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Free Look Period in Group Health Insurance
Free look period in group health insurance is another option available to review the features and benefits of the group health insurance.
Let us discuss how free look period works:
The free look is an insurance term offered by the insurer. The policyholder under the free look term may review the terms and conditions of group health insurance. Upon reviewing the terms and conditions, it is at the discretion of the policyholder to either terminate or continue with the purchased policy.
The insurance companies generally provide 20-30 days to the policyholder in order to review the policy. They may choose to terminate it if they are not satisfied with the benefits and coverage of the policy.
Commencement of Free Look Period
The free look period in group health insurance commences once the policyholder receives the insurance contract from the insurer. It is important to note that the policyholder may terminate the policy upon dissatisfaction. However, the insured is required to provide a reasonable or valid ground for the termination of a purchased policy.
The policyholder must submit the insurance contract along with the relevant documents related to the policy.
Termination of Insurance Policy
Upon receiving a valid ground, policy contracts, and other relevant documents, the insurer shall consider the termination request. If the insurer is satisfied with the grounds furnished by the policyholder, the amount of premium that the policyholder paid upon buying the policy shall be refunded to the bank account of the insured.
Benefits of the Free Look Period
- The free look period offers sufficient time for the policyholder to review the policy.
- It allows him to either cancel or accept the insurance policy.
- It refunds the amount paid by the policyholder upon cancellation of the insurance policy.
- The Free look is available for every kind of insurance plan.
- The insured does not incur any significant loss if not satisfied with the policy.
Grace Period in Group Health Insurance
The insured or policyholders may lose the policy coverage if they fail to renew the policy. The grace period in group health insurance offers some extra time for the policyholder to renew the policy upon its expiration.
Let us discuss how the grace period works.
Management for Grace Period
The states are responsible to manage how long the grace period should last upon expiration of the group health insurance policy.
Cancellation of Policy
The insurance companies wish the grace period to be as short as possible. It protects their interest from paying for the damages upon expiration of the policy. As long as the grace period in group health insurance is in effect, the insurer is subject to providing coverage to the policyholder.
However, if the policyholder fails to make the payment during the grace period, the insurer is not liable to provide coverage. Moreover, the insured is likely to move through the entire application process in order to obtain coverage under the group insurance policy.
Free look and grace period are important terms of group health insurance schemes. Free looks offer sufficient time for the policyholder in order to review the policy. While buying the policy, the policyholder may fail to acknowledge any terms which does not favour him. At the same time, the policyholder may obtain some more time in order to renew the group health policy.
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