Quick Overview

As per IRDAI guidelines, policyholders are entitled to a 30-day Free Look Period from the date they receive the policy document. In this specific window, you can cancel your policy without facing any penalties, and the insurer must refund the premium after permitted deductions. 

Many individuals purchase term insurance without fully understanding the details. As a result, some end up canceling their policy during the Free Look Period, or later, once they realize it doesn’t meet their needs. 

At Ditto, we've helped thousands of customers find coverage that’s right for them. Our goal is to ensure you never need to rely on the Free Look Period to exit a policy. But if you're considering cancellation, don’t worry. This blog will guide you through everything you need to know about the Free Look Period in term insurance.

Do you have questions about the free-look period for your term insurance policy? Book a free consultation call, and our expert advisors will help guide you.

How Does The Free Look Period in Term Insurance Work?

The free look period allows policyholders to carefully review their insurance policy after purchase and decide if it meets their needs. Upon receiving the policy documents, either by email or post, the policyholder can evaluate the coverage, policy terms, exclusions, and charges. 

This period not only allows for cancellation but also for modifications to the policy, such as changes to the payment term, frequency, or sum assured. However, these adjustments may take some time.

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A Step-By-Step Guide to Cancelling a Policy Within the Free-Look Period

01

Contact Your Insurance Provider

Notify your term insurer by phone or email that you wish to cancel your policy.

02

Submit a Written Request

You may need to submit a written request or cancellation form. Make sure to do this within the Free Look Period.

03

Include Relevant Documents

In the cancellation request, be sure to mention your policy number, date of issuance, reason for cancellation, and KYC documents.

04

Receive a Refund

After cancellation, you'll receive a refund of your premiums within 7 working days.

Benefits and Limitations of the Free Look Period

Benefits

    • Risk-Free Decision: The Free Look Period ensures you don’t lose too much money on a policy you later decide is unsuitable.
    • Flexibility: If your needs change or you find a better plan, you can walk away without any significant financial loss.
    • Peace of Mind: The reassurance that you can cancel without consequences helps reduce stress in the decision-making process.

Limitations

    • Time-Sensitive: The Free Look Period is not indefinite. If you wait too long, you lose your chance to cancel and get a refund.
    • Refund Process: While premiums are refunded, some fees (such as stamp duty, pro rata premium, and medical exam costs, if applicable) may not be refunded, depending on the provider.
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What if the Insurer Delays a Refund?

If the insurer doesn’t refund your premium (minus the permitted deductions), they must pay interest at bank rate + 2% on the refundable amount, and this interest must be paid suo moto.

What Happens if You Cancel Your Policy After the Free Look Period?

If you cancel your term insurance policy after the free look period, you typically won’t get any premiums back. This is because term insurance usually has no maturity value unless it’s a special variant, such as Return of Premium.

What Happens if You Stop Paying Premiums for Your Term Insurance Policy?

Stopping premiums results in a policy lapse, meaning you’ll no longer be covered. So if the issue is fixable (wrong details, wrong nominee, premium mode, etc.), it may be better to request a correction/endorsement instead of cancelling and restarting, especially if your health status has changed since purchase.

Why Choose Ditto for Term Insurance?

At Ditto, we’ve assisted over 8,00,000 customers with choosing the right insurance policy. Why customers like Aaron below love us:

Free Look Period in Term Insurance
    • No-Spam & No Salesmen
    • Rated 4.9/5 on Google Reviews by 15,000+ happy customers
    • Backed by Zerodha
    • 100% Free Consultation

You can book a FREE consultation. Slots are running out, so make sure you book a call now!

Conclusion

The free look period is an essential feature in term life insurance policies, offering you the flexibility to make sure you’ve made the right decision. Whether you choose to cancel or keep your policy, understanding this period can help you avoid costly mistakes. And if you’re looking for expert guidance on choosing the right plan, Ditto is here to help you every step of the way.

Frequently Asked Questions

How long is a free look period for insurance?

The free look period typically lasts 30 days for term insurance plans.

Can I cancel my policy after the free look period?

Yes, but you may not receive a refund.

What should I do during the free look period?

The free look period is your chance to carefully review your policy and ensure it’s the right fit. During this time, check key details such as the sum assured, policy term, and premium amount; review riders, exclusions, and waiting periods; and verify that personal information, such as age, nominee details, and medical disclosures, is accurate.

Can I switch to a different term insurance provider after canceling during the Free Look Period?

Yes, you can switch to another provider, but make sure you have adequate coverage in place before canceling your current policy.

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