Yes, life insurance has a free-look period! During the free-look period, you can drop your insurance policy and receive your paid premiums back without penalty.

What is a Life Insurance Free-Look Period?

When you first purchase an insurance policy, you can cancel it within the first 10 to 30 days. After this point, you will lose the premiums you paid and might face cancellation fees.

Essentially, the free-look period is a trial run. If, for any reason, you’re dissatisfied with your coverage or you want to cancel for any personal reason, you can do so, for instance, a new job or changes to your financial needs. Life insurance providers are legally required to provide at least a 10-day free-look period, but many require even more. Your contract may also include a longer free-look period.

Not every free-look period starts at the same time, either. Some start when your policy becomes active, others when you receive your paperwork. Be sure to find out the starting time of your free-look period to keep track of how many days you have left to cancel if you decide to.

How it Works

You can cancel your policy during the free-look period. If you don’t, your policy will carry on normally from there. It’s rare, however, for individuals to cancel their policy now. But it’s the only way to receive a refund for your premiums unless you get a return-of-premium rider.

To cancel your policy during the free-look period, you need to contact your insurer — they won’t know you want to cancel if you don’t tell them, and you won’t get your premiums back.

If you decide to keep your policy, all you need to do is continue paying your monthly premiums. Not doing so may result in losing your coverage. And, if you want to cancel later on because your rates are too high, you might want to try a rate reconsideration first to see if you can lower your premium.

Canceling Your Policy

Canceling looks different for different life insurance policies. To cancel a term life policy, simply stop paying your premiums. You will, however, need to call to get those premiums back if you cancel within your free-look period.

To cancel a whole life policy during the free look, call your insurer. You’ll also need to call them if you cancel after this period ends. If you cancel after the free look, you won’t receive your premiums back, and you may face penalties.

Know Your Coverage Inside and Out

Better Insurance Management will ensure you know how to use your free-look period and more. Call us at (732) 458-5000 to learn more.