Insurance Return Scheme: Increasing the free-look period will ensure protection of the interests of insurance customers. Customers will get more time to surrender the policy without paying any fees if they do not like it.
Insurance customers are soon going to get a great facility in the country. Those purchasing any life insurance or general insurance product can get a free-look period of 30 days. Insurance regulator IRDA has prepared a proposal in this regard. Currently, insurance customers get a free-look period of 15 days.
What is free-look period?
Free-look period refers to the period during which insurance customers have the facility to return a newly purchased product if they do not like it. Suppose you purchased a new life insurance or general insurance product.
After purchasing, you noticed some flaws in that particular product or you found a better product. In such a situation, you can surrender that insurance product for a fixed period and no fee is charged from you for this. This time is called free-look period.
Current rules for free-look period
There is already a provision for mandatory free-look period in the insurance rules. Currently, companies have to offer a free-look period of at least 15 days with every life insurance and general insurance product. For policies purchased under electronic policy or distance mode, this time is 30 days.
The current rule says that companies can offer a free-look period of 30 days to all their customers, but it is not mandatory. IRDAI proposes to increase the mandatory condition of 15 days to 30 days.
IRDA prepared this draft
For this, the insurance regulator has prepared a draft named Insurance Regulatory and Development Authority of India (Protection of Policyholders’ Interests and Allied Matters of Insurers) Regulations 2024. The draft states that insurance products purchased through any mode should have a free-look period of 30 days from the date of receiving the policy document.
Customers’ interests will be protected
IRDA says that by getting 30 days time, insurance customers will be able to understand the documents of their respective products better. If they do not understand anything after reading the documents carefully,
they can contact their respective insurance company to clarify their doubts or surrender the policy if they find any of the terms unfavorable to their interests. By increasing the free-look period, customers will be able to surrender the policy for 30 days. For this, they will not have to pay any separate fee and the insurance company will refund their first premium amount in full.
