Insurance is like marriage, a long term commitment. And, when it comes to marriage if you get a wrong life-partner, entire life becomes a tale of adjustments. But the good news is if you have landed yourself into a wrong/not -required policy contract, the Free Look Period clause comes to your rescue. Free Look Period facility is a great tool to avoid the mis-selling of insurance and has saved lot of people from dragging on to something they do not want to continue or require. But remember this friend is there for only 15 days.
What is a Free Look Period in Insurance?
A policy holder can return the policy back to the insurer within 15 days from the receipt of the policy documents. This can be done only for Life and Health policies.
Benefits of Free Look Period
- In case the customer feels he has not received what was being told or discussed with the agent he has an exit route through Free Look Period. He can go through the finer details of the contract and if not satisfied can return the policy.
- In cases of mis-selling, Free Look Period is used to safeguard the customer’s interest. There have been cases where customer has been explained a different policy and he receives a different policy or customer gives cheques for FD to a banker and he receives a single premium policy. Intentional mis-selling can be controlled through the Free Look Period facility.
Deductions while applying for Free Look Period withdrawal
In case of Free Look Period withdrawal, the policy gets cancelled and entire premium is paid back to the investor deducting following things:
- Charges incurred by the insurer for medical tests of the policy holder.
- Administrative and service cost like stamp duty etc.
- Charges for mortality for the period the policy was in force.
In case of ULIPs the policy holder will have to bear the NAV movement.
Procedure of using Free Look Period
In case you wish to return the policy, immediately call the insurer customer service department and enquire about the procedure. They may ask for the return of the original policy contract and the cancellation form. You may also visit the local branch in person to do the required formalities.
1) It has been noticed that some insurers send the policy documents to the Agent. And in case of hanky-panky business the agent makes sure that he delivers you the documents only after the expiry of 15 days. Make sure that you follow up with the agent and get the documents on time.
2) Once you have expressed interest of not carrying further with the policy, agent will try to counter and will try to linger on certain days promising you to “get rectified” or “will provide details” kind of excuses. In a scene like this, keep track of the days and go directly to the insurer and submit back the policy.
3) Insurers have different procedures for this facility. Some insist on informing the call-center and some have specified format. It is better to get details of the procedure and act accordingly.
4) Do keep margin for the transit time. There can be postal/courier delays etc.. Act well in time and take care that you do not goof up with the deadline. Do collect POD or acknowledgement once you surrender the policy so that if required in future you have evidences to fight in case insurer rejects your Free Look Period request.
But as they say, “Be aware”. It is better to let your agent know in the first meeting itself, that you know all about the Free Look Period clause. Enlighten him that if he tries to conceal or mis-represent you will exercise your right.
And as mentioned in the opening line, for those who are still thinking about Free Look Period facility in marriage, my sincere apologies and best wishes. Do share your Free Look Period (insurance related and not your marriage related) experiences/concerns/queries in the comments section.
Few Important Points shared by Abhinav Gullechha
- In case a policyholder has suffered from mis selling, limit of 15 days is not applicable. He can come back anytime during the policy tenure, however, it is advisable to write to insurance company as soon as the mis selling is noted. The greater the delay, it gets more difficult to prove the fact of mis selling…
- In case of Freelook, it is advisable to directly contact/ write to the customer care rather than depending on the agent. In case the agent delays the case, it may be difficult to explain the delay to insurance company, in absence of any documentary evidence/ correspondence with the agent.
- On the policyholder’s part, it’s a good idea to make a note of the policy received date on the face of the policy document, as it can greatly help in tracking for Freelook, if need arises
- Freelook option must not be misconstrued as an option that allows the policyholder in being lax at the time of product selection. Prospect should do his/her own due diligence at time of product selection. Its no great fun wasting all the time in the world applying for a product without adequate research and then making a Freelook claim. And yes, if one cant make the choice himself, its better to take expert advice.
Must share Free Look Period concept with your friends – let’s save few more financial lives.