What is Free Look Period?
The Free look period means that customer has 15 days from the date of a ULIP (Unit Linked Insurance Product) or Insurance policy’s receipt to review his or her purchase decision. With the provision of the “free Look period” a policyholder gets 15 days time to go through the policy documents, understand how the policy is going to work and convince himself that he needs such a policy before deciding to commit funds every year over the plan tenure. This provision has the objective to make the process of buying insurance transparent, easy and fulfilling for the customer and curb the misselling by the agents. Usually a customer buys a policy and later realizes that it was inappropriate and was sold to him / her focusing on the company’s / agents profits / commissions rather than her / his own requirements. This leads him/ her to stop paying premiums and let the policy lapse or decides to surrender the policy. This earlier than expected drop out is also not good for the health of the company and the Free Look Period facility makes it more likely that a customer remains with the company for a longer term. Within 15 days a customer may return the policy and get the premium back after deducting the stamp duty charges and the cost of a medical check-up etc.