An important purchase that decides how well you are positioned financially in the event of an eventuality, a vital aspect of insurance is the free look period. It is a 15-day window that you get to review your policy and cancel it if you feel it doesn’t suit your requirements.
You must judiciously use this period as there’s little you can do once this period is over and you discover that the policy doesn’t suit you. So, how can you do so? Let’s find out.
While your agent must have told you all the good things about the policy, it’s essential to read the terms and conditions carefully to confirm them. There could be many things that you would know about your policy only after going through the fine print. In some cases, it might come to you as a surprise.
Understand the terms and conditions and see if all the details, such as sum insured, premium payment term, nominee name and so on, are correct. If there’s any mistake, inform your insurer at the earliest and get it rectified. Also, after reading the fine print, if you feel that the policy doesn’t fit your scheme of things, you can get it cancelled and get the premium refunded.
While we, as policyholders, are interested to know about the inclusions in a policy, exclusions don’t deserve the attention they warrant. To put it otherwise, we don’t care about the exclusions. However, this can be a major mistake and be a cause of concern later during claims settlement.
It’s essential to use the free-look period to understand the conditions when the policy wouldn’t cover you. This will help you act accordingly and prevent heartburn later. The exclusions are clearly defined in the policy bond, and knowing them will actually help you leverage your policy for your benefit.
More often than not, insurance policies are purchased during the final quarter of a financial year to reduce tax liability. To put it otherwise, saving tax seems to be the only objective. However, the utility of insurance goes far beyond tax savings.
During the free look period, evaluate your goal and see if the policy you have purchased actually helps you fulfill it or not. It’s always advisable to align your investment with your goal, and insurance is no different.
Find out if there’s more to buying an insurance plan than merely bringing down your tax liability. In a nutshell, evaluate your goal once again and go ahead with the policy only if it helps you fulfill it.
As evident, you can utilise the free look period in more than one way to go through your insurance policy and understand its fine details. If you wish to cancel it, inform your insurer, following which you need to fill up a form in a prescribed format.
Mention the policy details, reasons for cancellation, and the date of receipt of the policy document, among others. Upon cancellation, you will get your premium refunded.
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