5 Things To Know About Free-Lock Insurance Period

BENGALURU: A customer friendly feature necessitated by Insurance Regulatory and Development Authority under which a time window of 15 days is given to the policy holder to examine the policy thoroughly and can opt out if does not find it suitable. There is a time period of certain days mandated by the IRDA wherein customers can review the policy and if dissatisfied can cancel the policy, according to simpleinterest.in.

Unit Linked Insurance Policy (ULIP’s) Cancellation Process:

ULIP’s cancellation is done by insurer purchasing the units allotted to the policy holder at the Net Asset Value (NAV) on the day of cancellation of the policy. Suppose your premium was Rs. 100, your insurer incurred expenses of Rs. 20 and invested remaining Rs. 80 in the fund option. On the day of cancellation, the NAV has soared to Rs. 90. Now the insurer will refund Rs. 90 after adjusting charges towards stamp duty and medical test. 

Termination Charges:

Always remember not to expect full refund of your premium even if you cancel the policy in a free-look period. The insurer deducts a certain amount incurred on medical test, stamp duty and admin charges. If the risk cover has already commenced, the proportionate risk premium for the period will also be adjusted with your refund amount.

Cancel Policy in Written Through Insurer:

The cancellation process of the policy requires a written application from the policy holder before the end of 15 days free-look period. Along with the other details such as-receipt date of policy documents, reason for cancellation, receipt of first premium and bank details, or cancelled cheque for refund. If you decide to terminate the policy then do not merely rely on just the agent.

Many a times agent withheld the documents to delay the process which bars you from cancelling the policy in the free-look period.

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