Free Look Period in Health Insurance: All You Need to Know

What happens if you realise your Health Insurance policy does not meet your expectations? There could be various reasons for you to want to cancel a Health Insurance policy after purchase. A Health Insurance policy is a complex document comprising heavy technicalities or terms and conditions you may not immediately comprehend. It is also likely that you did not research well before buying the policy or simply missed out on certain terms that could result in unexpected out-of-pocket expenses during a potential claim. Also read : A guide on the basics of Health Insurance To help policyholders, the Insurance Regulatory and Development Authority of India (IRDAI) directed all the insurance companies in India to provide a free look period benefit to all Health Insurance policy buyers. It is a provision that allows you to cancel your policy within a specified period after your policy purchase.

The free look period is a predetermined time frame when you can terminate a Life Insurance policy without paying any penalties, such as surrender charges.The free-look period for Life Insurance in India typically lasts 15 days after purchasing the policy. During this period, you have the right to review the terms and conditions of your policy. If you are unsatisfied with any aspect of the policy, you can cancel it and receive a full refund of the premium paid.

Suppose you purchase a new Health Insurance and immediately realise you do not want to continue. In that case, you can exercise the free-look period option to cancel your policy within a stipulated period. Also read : Getting started with a Group Health Insurance policy

The free look period for Health Insurance applies across all policies. However, the exact duration and terms may vary between different insurance companies. Thus, it is essential to recheck your policy terms and limitations. It is pragmatic to seek clarifications from your insurance company adviser for specific details regarding the free look period for the policy you are considering. Keep the following points in mind:

The free look period is a specified period that can range from 15 days up to 30 days to review your insurance policy. This enables you to make an informed decision about the suitability of the policy for your needs.

As per the guidelines set for the insurers by the IRDAI, the insurer will have to refund the premium amount you paid after making the following deductions:

• The risk premium proportionates to the coverage period during which the policy was active.
• Expenses incurred by the insurance company for your medical tests.
• Stamp duty charges.

On surrendering your policy, your insurance company may deduct the stamp duty and expenses incurred for medical tests, if any. Also, the company will deduct the proportionate risk premium for the days the policy was active until you initiated the cancellation.

While the free look period provides you with flexibility, certain types of policies or specific circumstances may have exceptions or limitations to the free look period. Thus, it is important for you to carefully review the policy terms and seek clarity from your insurance adviser to understand any specific provisions related to the free look period.

Some companies only offer a free look period in Health Insurance if you purchase the policy for a minimum tenure of three years.

• During the free look period, you can ask doubts and clarify any questions regarding your policy.
• If you decide to cancel the policy during the free look period, you need to communicate this intention to the insurance company. This can be done through a cancellation letter or an email to the insurer.
• If you are unsatisfied with your policy, you can cancel the same during the free look period, and the insurer will provide a full refund of the premium paid. However, any charges incurred for medical examinations or stamp duty may be deducted from the premium refund.
• You may need to return the original policy document to the insurance company to initiate the cancellation. This helps ensure that the policy is not misused after cancellation.

Inform your insurer

If you want to cancel your policy during the free look period, the first step is to inform your insurance company about your decision. You can cancel the policy during this period, either online or offline. You can also contact your Third-Party Administrator (TPA) involved during the purchase of your policy.

Send formal cancellation request

Next, request for cancellation via an email to your Health Insurance company. Provide reasons for your decision to discontinue.

Surrender policy

You must submit a list of documents along with your cancellation letter or email. You may have to surrender the original copy of the policy and provide a copy of your identity proof along with your bank details.

Receive refund

After you submit your request to surrender your policy and the required documents, your insurance company will acknowledge your request by email or via your TPA. Check for a refund of all charges in your bank account.Do not forget to share the following key details with your insurer:

• The date on which you received the policy document.
• The reason for cancelling the policy.
• Information about the agent you bought the policy from, if applicable.
• Bank account details to get the premium refund.

• Health insurance companies give you a period of 15-30 days to evaluate your policy terms and conditions after you buy the policy. This period is called the free look period. You can cancel or surrender the policy in the free look period if it does not meet your requirements.
• If you cancel your policy within the free look period, you may incur minimal deductions and stamp duty charges before refunding your premium. However, there are no other penalties.
• You can cancel your policy within the free look period after submitting a written request, providing the documents required by your insurance company and surrendering your policy.