The insured will be allowed 15 days from the date of receipt of policy to review its terms and conditions and to return it if not acceptable
If the terms and conditions of standard personal accident cover are not favourable, or the coverage offered to you is not serving your requirements, you can now easily cancel a policy within 15 days from its date of purchase.
The Insurance Regulatory and Development Authority of India (Irdai), in a circular issued on 23 March, clarified that the insured will be allowed 15 days from the date of receipt of policy to review its terms and conditions and to return it if not acceptable.
Last month, while notifying the standard personal accident cover guidelines, the regulator did not mention details of the free look period.
This raised the questions: What will happen if policy buyers are not satisfied with the terms and conditions of a policy? Wouldn’t they be able to cancel the policy within the free look period? The regulator has now said that there will be a 15-day free look period on the new policy and not on renewals. Further, if the insured has not made any claim during the free look period, the insured will be entitled to the following:
> A refund of the premium paid less any expenses incurred by the company on medical examination of the insured person and the stamp duty charges.
> Where the risk has already commenced and the option of return of the Policy is exercised by the insured, a deduction towards the proportionate risk premium for a period of cover.
> Where only a part of the insurance coverage has commenced, such proportionate premium commensurate with the insurance coverage during such period.
The free look period is one in which you can discontinue a newly purchased insurance policy. Basically, if you are not happy with the policy you bought, or the terms and conditions related to it, you can review the insurance policy and terminate it within a specified period. Normally, most insurance policies have a provision of a free look period that gives you the freedom to return/cancel the policy within a specific time.