What is a free look period?
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Asked July 21, 2015
Life insurance is a long term commitment, and it is not uncommon for someone to change their mind about a policy after they have purchased it. Because of this, most life insurance policies include a free examination clause, sometimes called a "free look" period.
In most cases, the free look period is a short time, usually between 10 and 30 days. If you decide to cancel the policy within that period of time, your entire investment will be refunded to you. Note that some insurance companies only offer a full refund within the first 10 to 15 days, and will rebate the money you have paid minus handling fees, between that deadline and, for example, the 30-day mark.
It is up to you make certain that you are happy with the policy you have purchased within the free look period. After that, you are legally obligated to the terms of the contract, including making premium payments. This gives you a chance to back out of a policy that you were talked into during, for instance, an energetic sales pitch. Once you have had time to think about the consequences of the purchase, you can still notify the insurance company and cancel the policy before you are stuck with it for the duration of the policy.
You can still cancel a life insurance policy after the free look period. You will not get the full investment back, but you will be reimbursed for any unused portion of the premiums and any accumulated cash value you have built into the policy. You cannot get back any premiums you have paid for time that has already elapsed, and some policies, including most term life policies, may not refund any portion of a canceled policy.
Answered July 24, 2015 by Anonymous