Policyholder Can Cancel Term Insurance during-Free look Period

Purchase an insurance policy and insured person is stuck with it. The situation is completely different from apparel which person can exchange due to the fitting is not proper.

A newly purchased term insurance India can be terminated in case the buyer is not satisfied with it. The Insurance Regulatory and Development Authority include a provision whereby the unfulfilled client can return a plan and receive a refund in case the insurance does not match policyholder’s expectations.

The buyer has a chance called the ‘free look period’ during which policyholder must read the policy documents thoroughly and then select whether to keep this term insurance for life or not. This feature gives 15-days tenure from the receipt of the policy to finalize whether to keep the policy or discontinue it.

If term insurance India is canceled in this period, then the customer receives a refund of the premiums. It applies to any type of term insurance policy as well as health care plan with the least term of three years. This tenure covers a policyholder in case insured person thinks that the policy bond is not what he or she signed up for.

It secures a client from dangers of mis-selling and acts like an exit route that takes insured out of an unsuitable plan, but policyholder must act swiftly. The customer should know that a free-look cancellation does not include penalties or any other charges.

Though, insured may not get a complete refund of premium because the insurance company will subtract costs incurred during the stamp duty, medical examination, mortality charges for the interim tenure and other administrative expenses. But, all such deductions tend to be very minimal.

In case of ULIP plans, movements in net asset value will be adjusted in the settlement. People know very less about insurance sector, so they can’t decide on the utility of a given plan. Check details of all persons included in the policy and verify that there are no discrepancies in insurance terms, sum assured, premium amounts etc.

In case the person has opted for a with-profits plan, then make sure it is mentioned in the policy. Carefully read the inclusions and exclusions of the term insurance for whole life. When you study your policy thoroughly, you can easily come to know about term insurance advantages and disadvantages.