Will I get full refund of the premium paid, if I cancel my policy within the free lock period?
In order to protect the interests of consumers, IRDA (Insurance Regulatory & Development Authority) has included a provision which allows customers to return their policies that they are not satisfied with and also get a refund for the same. As per the IRDA regulations, policyholders are granted a free look period, during which they can go through the terms and conditions stated in the insurance policy to evaluate if the policy is indeed beneficial for them or not. Usually there is a 15 day free look period which is granted, during which policy holders may request for changes to be made to the features of their policy, cancel their policy and take a fresh new policy. Listed below are some important details regarding the free look period which can be helpful.
Policyholders can avail the free look period within a period of 15 days, which begins from the date on which they receive the policy document. In the event that a policyholder is availing the free look period i.e. requests for any alteration in the policy or wishes to cancel the policy, they have to prove the date of receipt of the policy document.
Request To Avail Free Look Period
In order to avail the option for an insurance policy, the policy holder must submit a request for the same, in writing, to their insurance provider. Alternatively, many insurance providers allow policyholders to avail this facility with the help of an online downloadable form which is available on the company’s website.
Furnishing of Details
When it comes to availing the free look period, policyholders are required to furnish certain details like the date on which they have received the policy document, information about the agent who may have assisted them on signing up for the policy and the reason due to which they wish to cancel their policy. For the purpose of refund of premium paid towards the policy, policyholders must provide correct bank details like the account number, etc. A revenue stamp of the specified denomination must be pasted on the form, along with the signature of the policyholder.
Documents to Be Provided
Policyholders must provide the original policy document which was issued by the insurance company, receipt of the first premium payment and a cancelled checked for the purpose of the refund. In case the original policy document is not available, policyholders must provide an indemnity bond.
Refund of Premium
In case the policyholder has decided to cancel the policy, they can obtain a refund on the cancelled policy. The amount of premium to be refunded will be provided after making the following deductions:
Proportionate risk premium for the coverage period.
Stamp duty charges.
Any expenses borne by the insurance company towards medical tests.
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