Free Look Period

The free look period is a statutory window, defined by IRDAI, during which a new policyholder can review the policy document after receiving it and cancel without penalty if the terms are not what they expected. For most life and health insurance policies issued in India, the free look period is 15 days from the date of receipt of the policy document, extended to 30 days for policies bought through distance marketing (online or by telemarketing) and a further 30 days for senior citizens. The rationale is consumer protection — insurance is typically 'sold' rather than 'bought', and a buyer who discovers a waiting period, a co-pay, or a policy scope that does not match the agent's pitch should be able to walk away.

On cancellation within the free look period, the insurer refunds the premium minus three deductions — the proportionate risk premium for the days the policy was in force, the cost of any medical tests the insurer paid for, and stamp duty charges. Worked example: a 35-year-old buys a ₹1 crore term plan for an annual premium of ₹14,500, receives the policy document by email on 3 October, reads it on 10 October, and decides the rider exclusions are not acceptable; if the insurer cancels and refunds on 14 October, the payout is ₹14,500 minus roughly ₹450 of proportionate risk premium for 11 days minus ₹600 stamp duty minus ₹1,800 for the tele-medical test, yielding a net refund of around ₹11,650. A common misconception is that free look is a discretionary gesture by the insurer.

It is a statutory right under the IRDAI (Protection of Policyholders' Interests) Regulations, and the insurer cannot refuse cancellation within the window. Another common misconception is that free look applies only to the first year — it applies only at inception. On a renewal of an existing policy, there is no free look; if the renewal terms have changed and you are unhappy, the escalation paths are a grievance notice to the insurer's grievance cell, then the IRDAI Bima Bharosa portal, and finally the Insurance Ombudsman.

Use the free look: read the policy document carefully on day one, and if a material feature is different from what you expected, act within the window. Related: grievance redressal, policy document, lapse.