Free Look Period
Key takeaways
* A free look period is a short timeframe—typically 10 to 30 days—during which a new life insurance or annuity buyer can cancel the policy without penalty and receive a full refund of premiums.
* The period begins when the insured receives the executed policy (the delivery date), but exact start and length vary by insurer and state law.
* After the free look expires, cancellations may incur surrender charges or forfeit premiums, though you may be entitled to any cash value minus fees.
What it is
A free look period gives a purchaser time to review a newly issued life insurance policy or annuity and decide whether to keep it. If the policyholder cancels within that window, the insurer must rescind the contract and refund premiums—no surrender charges or penalties apply.
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How it works
- Start date: Usually begins on the day the policy documents are delivered to the policyholder. Check with the insurer for the exact delivery date they use.
- Length: Varies by state and company; common ranges are 10 to 30 days. Some states set minimums (for example, certain states require at least 10 days).
- Process: To cancel, notify the insurer or your agent (by phone, online, or mail, depending on the company). The insurer will void the contract and refund the premium.
- Refund amount: Typically the full premium paid. In some cases rules differ by state and contract type, so the refunded amount may reflect account value or number of payments.
Why it exists (brief history)
Free look periods emerged after historical abuses in the life insurance industry—high-pressure sales and deceptive practices prompted state regulation to protect consumers. The provision gives buyers a chance to reconsider and obtain legal recourse without financial penalty.
Example
If you buy a variable life policy and receive the executed policy documents two days later, your free look period begins on delivery. If state law provides a 10–20 day free look and you decide within that window—after consulting an attorney—to cancel, the insurer must refund your initial premium.
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Common questions
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Can I cancel a life insurance policy at any time?
Yes, but if you cancel after the free look period you generally will not get a refund of premiums. You may be eligible to receive the policy’s cash value (if applicable) minus fees and surrender charges. -
What is a 30-day free look period?
It simply means you have 30 days from policy delivery to cancel without penalty. Whether a policy has 30 days depends on the insurer and state law. -
Can I cancel online?
Many insurers accept cancellations online, by phone, or by mail. Check the company’s process—some may require forms (e.g., a release form) to complete cancellation. -
When does the free look period begin?
It begins when you receive the policy documents (the delivery date). Confirm with your insurer which date they consider the official start.
Bottom line
The free look period protects consumers by allowing time to review a new life insurance policy or annuity and cancel it for a full premium refund if unsatisfied. Because rules vary by state and insurer, confirm the length and cancellation process with the issuing company before relying on it.