IRDAI proposes to raise free look period from 15 to 30 days. Details here

The insurance regulator IRDAI (Insurance Regulatory and Development Authority of India) has proposed to extend the free look period for the policies from the current 15 days to 30 days now. 

This is one of the policies proposed to ensure protection of policyholders’ interest. The others include the provisions relating to bank accounts, nomination, issuing policies in electronic form, among others. 

The proposal was part of draft on IRDAI (Protection of Policyholders' Interests and Allied Matters of Insurers) Regulations, 2024. One part covers provisions relating to protection of the interest of the policyholders. The second covers provisions relating to operation and allied matters of the insurers. 

These are some of the proposals

A. The free look period for the policies, obtained through any mode, will be 30 days from the date of receipt of the policy document.

B. Insurers to collect the details of bank accounts of insured at the proposed stage to enable electronic transfer of refund and for payments of claims.

C. No policy to be issued unless nomination is obtained.

D. Nomination provisions relating to general, wherever applicable and health insurance policies introduced.

E. Insurance policies meeting the defined criteria to be issued in electronic form. 

Siddharth Singhal, Business Head, Health Insurance, Policybazaar.com, says, “The increase in the freelook period will be a positive move towards ensuring customer satisfaction and protection. It allows customers to review their insurance policy and cancel it within a specified timeframe if they are not satisfied with the terms and conditions. Extending the free look period from 15 days to 30 days will provide customers ample time to research and understand the policy they have purchased."

“We are in favour of making the free-look period to 30 days a standard for all the life and health insurance policies for the customers. It enables the customers to review the policies in detail, not only just to understand but also if they have any query or confusion regarding the same. Given that the scope of coverage comes with conditions and clauses of exemption, it becomes complex for customers to understand quickly. Sometimes, in the rush of buying policy especially around fiscal-end, customers tend to believe what’s being said and the basis that finalises the buying decision. The nitty gritty around specifics are only known once the policy document is received and given the complexity in certain products, it takes a longer time to review and understand the finer details,” says Apaar Kasliwal, executive director at PolicyBoss.com.