The clock on a free look period starts once you receive your policy. The period normally lasts at least 10 days but could be as long as 30 days, depending on the state laws where you live. For instance, Texas law requires the free look period to be at least 10 to 20 days. In New York, the period must be 10-30 days. A 30-day period is required in New York for any policy offered by mail. Keep in mind that the free look period for a new life insurance policy might be shorter than it is for a replacement life insurance policy. For instance, a North Carolina policyholder has a minimum 10-day free look period for new coverage and a minimum 20-day free look period for replacement coverage.
An Example of a Free Look Period for Insurance
Let’s say Rasha purchases a $500,000 life insurance policy and then reads through the policy after she receives it. The payments are somewhat high, so she checks in with her financial advisor about whether the policy is a good use of her money. After the meeting, Rasha realizes she’d rather invest the money that she planned to use for monthly insurance premiums. She’s within her free look period, so Rasha asks her insurance company to cancel her policy and refund any premiums she’s paid
Free Look Period vs. Grace Period for Life Insurance
Typically, life insurance policies have a free look period as well as a grace period. The free look period refers to the window of time when you can cancel an insurance policy for any reason and receive a refund of your premiums paid. The grace period refers to a period of time after your premium due date when you can make a late payment without losing your coverage. Most states make insurance companies give you a grace period of around one month.
