For many individuals who are the sole earning member of their family, the well-being of their loved ones is important, especially if something were to happen to them and there is no other source of income. Even if you leave behind savings for them, that amount alone will not be sufficient for them, especially during an emergency.
One way you can ensure your family's financial safety is by opting for a life insurance policy. However, what if the policy you have bought does not fulfil your requirements? Can you cancel the policy?
The answer is - yes, you can. To do so, you will have to take the help of the free look period. Keep reading to find out more about this feature.
What is life insurance?
Life insurance policy is a type of policy in which the insurer and the policyholder get into an agreement. As per this agreement, the insurer will financially compensate the family of the policyholder in the event of the untimely demise of the policyholder. Some life insurance plans also offer maturity benefits as well at the end of the policy term.
What is free look period?
Dhaval, for example, recently bought a life insurance. While going through the policy documents, Dhaval found that the plan was not matching his requirements and was falling short than expected. Having paid the premium for it, Dhaval was confused whether he can cancel his policy or not. Luckily for Dhaval, he was going through the documents during something known as the free look period.
Free look period allows the policyholder to thoroughly assess their policy on the basis of what its offers and how sufficient it is for them. If the policyholder is not satisfied by the policy they have purchased, they can cancel their policy during the free look period. With the help of this period, they are not bound to accept the policy even if they are not satisfied with some of the clauses of the policy.
How does the free look period work?
Suppose you purchase a life insurance plan, and you pay the premium for it. Once you receive the documents, you go through them and realise some of the clauses in the policy are different than what was offered before the purchase of the policy. One of the benefits of life insurance is the free look period. It begins once you receive the policy documents after the purchase of the policy. Generally, this period last from 15-30 days.
During this period, if you are unsatisfied with the policy you have purchased, you can cancel the policy. To do so, you need to inform your insurer about it. The insurer might then mediate and clear your doubts related to the policy. If you are still not satisfied with their explanation, you can cancel the policy.
After the intimation is sent to the insurer, the insurer will begin with the process of cancelling your policy. You are required to submit documents pertaining to the cancellation of the policy. After the submission and verification of the documents, the insurer will cancel the policy. The premium that you paid for the policy will be refunded. The insurer will deduct a certain amount related to the charges of issuing the policy, before refunding the premium amount.
Things to remember about the free look period
1. You can cancel your policy after the free look period is over. However, you might get a certain premium amount, which might get deducted from the refund amount.
2. The request to cancel your policy has to be given in a written format, along with the reason for cancellation, relevant policy documents, and other established requirements.
If you are not satisfied with the policy that you have purchased, you can get it cancelled during the free look period. Do keep in mind all the details related to this period. If you wish to purchase life insurance, you can use the life insurance premium calculator to see how much your policy would cost on the basis of your requirements.