Free Look Period in Insurance
30 days to read a new life or health policy and return it. Here is what you get back.
The free-look period is a window after you receive a new policy in which you can read it, change your mind and return it for a refund, without giving a reason that satisfies anyone but yourself. It exists because insurance is often sold quickly and read slowly.
For IC-01 it matters twice over: as a policyholder protection under IRDAI's rules, and as a number the exam likes to test. That number changed in 2024, so check which one your study material uses.
You save ₹300
- Full 100-question mocks
- Principle-by-principle practice
- Section-wise sets
One payment, no subscription
The Free-Look Rule Today
From IRDAI's Protection of Policyholders' Interests Regulations, 2024 and the 2024 master circular.
| Point | Current rule |
|---|---|
| Length | 30 days |
| Starts from | The date you receive the policy document, electronic or physical |
| Policies covered | Life policies, and new individual health policies, with a term of one year or more |
| Condition | No claim made under the policy |
| Reason needed | You state a reason, but the insurer must accept the cancellation whatever it is |
| Deductions allowed | Proportionate risk premium for the days covered, medical examination costs, stamp duty |
| Unit-linked policies | Units are bought back at the NAV on the date of cancellation, after the same deductions |
| Refund deadline | 7 days from receipt of the cancellation request |
| Late refund (life) | Interest at bank rate plus 2%, paid by the insurer without being asked |
What Your Courseware May Still Say
Under IRDAI's 2017 regulations, the free-look period was 15 days, or 30 days for policies bought electronically or through distance marketing, with refunds due within 15 days. The 2024 regulations replaced this with a flat 30 days for all eligible life and health policies and a 7-day refund deadline. If an exam question offers both 15 and 30 days, read the wording carefully, and answer from the current rules unless the question is plainly about the older position.
Worked Example: Returning a Term Plan
Priya buys a ₹1 crore term plan with an annual premium of ₹18,000 and receives the policy by email on 1 June.
- 1
She reviews it
On reading the policy she finds it excludes a hobby she pursues regularly, which she had not realised when she bought it.
- 2
She asks to cancel
On 20 June, within 30 days of receipt, she writes to the insurer returning the policy and stating her reason.
- 3
The insurer deducts
Risk premium for the 20 days she was covered, the cost of her medical tests, and the stamp duty paid on the policy.
- 4
Refund paid
The balance must reach her bank account within 7 days of her request. If it is late, the insurer adds interest at bank rate plus 2%.
Quick practice on insurance principles. No signup.
Points People Get Wrong
- check_circleThe 30 days run from receipt of the policy document, not from the date of the proposal or payment.
- check_circleThe refund is not the full premium. Risk cover was given for some days, and medical and stamp duty costs were actually spent.
- check_circleFree look is for new policies. A health policy renewal does not start a fresh free-look period.
- check_circlePolicies with a term of less than a year are outside the rule.
- check_circleMotor, fire and other general (non-health) policies are not covered by the free-look regulation; they are cancelled under their own cancellation conditions instead.
How IC-01 Tests This
Expect the number (how many days), the starting point (from receipt of the policy) and the deductions (what the insurer may keep). The classic trap is choosing "full refund of premium" or picking 15 days from older material. Another is assuming free look applies to a one-year motor policy.
FAQs
What is the free look period in insurance?expand_more
A window after receiving a new life or health policy in which the policyholder can return it for cancellation and a refund, if they disagree with its terms or for any other reason.
Is the free look period 15 days or 30 days?expand_more
30 days under IRDAI's 2024 regulations, for life and new individual health policies with a term of a year or more. The 15-day period, with 30 days for online and distance sales, was the older 2017 rule.
What is deducted in free look cancellation?expand_more
Proportionate risk premium for the period of cover, the insurer's medical examination expenses and stamp duty. In unit-linked plans, units are repurchased at the NAV on the cancellation date.
Does free look apply to motor or general insurance?expand_more
IRDAI's free-look regulation covers life and new individual health policies only. Motor, fire and other general policies are cancelled under their own policy conditions.
Next steps
- Policy & Endorsementsarrow_forward
- Proposal & Cover Notearrow_forward
- Contract Essentialsarrow_forward
- Syllabusarrow_forward
Full-length IC-01 practice, timed and scored.