All You Need to Know about Free Look Period
Are you not satisfied with your recently bought health insurance policy? Are the terms and conditions not favourable or the coverage offered is not serving your requirements? Fret not, cancel the policy with a less hassle!
Yes, it is possible. If you’re new to the insurance industry, then let us tell you that every insurance provider comes with a provision approved by IRDA, which allows the policyholder to return the policy within a specific period. This is called ‘Free-look Period’.
Hence, free-look gives a second chance to review your existing cover and return if you are not satisfied. Let’s dive into detail about the concept and know how it works!
What’s Free Look Period in Health Insurance?
Whether it is an indemnity cover or defined benefit plans, all kinds of health insurance policies come with a free-look period of 15 days. However, some insurers may extend the period up to 30 days. This is a golden opportunity of the insured to return the policy if the policy doesn’t meet its requirements. The free-look period kicks in from the date of receiving the policy documents until 15 days within which, policy cancellation is possible.
In case you wish to return the policy, the insurer will refund the paid premiums after deducting a certain amount. Let’s know how this clause works in health insurance:
Free-look Period in Health Insurance-Key Takeaways
- Time Limit to Avail the Benefit: The benefits under the free look period clause can be availed within 15 days from the receiving of the policy documents. In case you are willing to return the policy or request for an alternation, you must prove the starting date of the policy to initiate the process.
- Request to cancel the Policy: You must submit a written request in order to avail free look benefit. Health insurers also allow the policyholders’ to initiate this by filling an online form to be downloaded from the official website of the insurer.
- Furnishing of Details: In order to cancel the policy within free look period, you’ll require to furnish certain details such as on which date the policy document is received by you, information of the agent if you’ve bought the policy through an agent, the reason for cancelling the policy etc. moreover, for the refund of premium, a valid bank account detail is required. You can get the list of required things on the official website or can take help from a customer care executive.
- Documentation to Cancel the Policy: Submission of original documents is essential to complete the policy cancellation process. You’ll need to provide the receipt of first paid premium, a cancelled cheque for the purpose of refund. In case the original document is not available, an Indemnity Bond is required.
Don’t Expect Full Refund: In case of policy cancellation, the insurance provider refunds the premiums after charging a minimal amount which includes:
o Charges for Stamp Duty
o Proportionate risk premium for the coverage period
o Expenses incurred paid by the insurer towards a medical test
Here's the Step-wise-Procedure to Cancel a Policy Within Free-look Period
- Carefully go through the policy fine print as soon as you receive it
- Contact the customer care, write to them and submit a request for cancellation. You can also approach the broker from whom you have bought the policy to initiate a free-look policy return.
- The insurance provider will send an endorsement and refund the premium within 7 working days
- Remember that, you can only cancel the policy during the free-look period. You can’t port it. Policy porting is possible at the time of renewal only.
- In case of health insurance, the insurance providers bear up to 50% of the cost incurred towards medical tests that are renewed every year. This amount is deducted while refunding the premiums in case of policy cancellation.
- Health insurance policies including indemnity and defined benefit plans such as critical illness plan have the window of 15 days to cancel the policy. However, there is an exception. The free-look period is only applicable if the policy has a tenure of 3 years.
The Final Word!
Free-look period is designed to serve the customers in case of the hour of need. However, to utilize this term to its fullest, you should know how it works and how to go with the process. Let’s make the most of your health insurance and stay sufficiently covered!
Written By: PolicyBazaar - Updated: 09 May 2020