What it is
The free-look period is a window after you receive a new insurance policy in which you can read the terms and conditions and send the policy back if you do not accept them. It applies at the start (inception) of the policy.
According to the Insurance Regulatory and Development Authority of India (IRDAI) on its policyholder portal, the facility is available for all life insurance policies. For health policies, it applies where the policy term is at least three years.
How it works
How long you have
IRDAI says the insured must get at least 15 days from the date of receipt of the policy. The window is at least 30 days for electronic policies and for policies sourced through distance mode.
The clock starts when you receive the policy, not when you pay the first premium.
What you get back
If you have made no claim during the free-look period, you are entitled to a refund of the premium paid, less certain deductions. The insurer may deduct:
- expenses it incurred on your medical examination, and stamp duty charges; or
- if the risk has already begun and you return the policy, a proportionate risk premium for the period you were covered; or
- if only part of the cover has begun, a proportionate premium matching the cover for that period.
For a unit linked policy (one where your premium is invested in market-linked units), the insurer may also make these deductions and repurchase the units at their price on the date you return the policy. So the value of the units on that day affects what you receive.
What it means for you
The free-look period is a chance to check the details you may have skipped at the time of sale: what the policy covers, what it excludes, the charges and the term. If something differs from what you were told, you can return the policy within the window.
A few practical points follow from the rules:
- Note the date you received the policy, and count the days from it.
- If you bought online, you get the longer window of at least 30 days, but it still ends.
- Expect some deductions. The refund is not always the full premium.
- The refund applies only if you have made no claim in that period.
If you are comparing health cover, our guide on what health insurance is explains the basics. Check the exact steps for returning a policy with your insurer, since IRDAI’s page sets the rule but not each company’s process.
Common mistakes to avoid
- Waiting until the last days of the window to read the document.
- Assuming every health policy has a free-look period. IRDAI’s page links it to a term of at least three years.
- Expecting a full refund after the cover has begun, when proportionate risk premium can be deducted.
- Ignoring unit price changes in a unit linked policy.
