What is a Free Look Period?
A Free Look Period is a time frame in which the owner of a life insurance policy can terminate the contract without surrender charges or other financial penalties. Even if a payment has been made, the insured will have a free look period where they can make the life insurance policy is what they want. Every insurance company is reacquired to offer a free look period.
This free look period usually lasts for approximately 10 days, depending on the insurer, permitting the policyholder to cancel and/or get a full refund for whatever money he or she has paid to date. Although in other cases, the free look period may last for as long as 30 days.
During this time, a policy owner may return a policy for cancellation. He or she may do so by either delivering the policy in person to the insurer or by mailing it in to either the selling agent or the insurer. The insurer then has 30 days from the date it was notified in which to refund the policy holder’s premium .
Once a life insurance or an annuity policy has been cancelled, the policies shall be voided, and the policy holder will be considered to be back in the same position as if no policy had been issued at all. Here, all of the premiums that had been paid into the policy are required to be refunded by the insurer to the individual within 30 days from the date that the insurer was notified that the policy holder had cancelled the annuity or life insurance policy.
It is important to note that the free look provision does not apply to group life insurance policies or to group annuities. Likewise, it also does not apply to credit life policies or for life insurance policy conversions.