Your bank relationship manager promised you "double returns" and sold you an insurance policy.
You signed the papers.
But when the policy document arrives, you read the fine print and realize: "This is not what I was promised! This is a low-return ULIP with high charges."
You call the agent to cancel. He says: "Sorry sir, policy is already issued. You cannot cancel now for 5 years."
He is lying.
Under IRDAI regulations, every policyholder has a "Free Look Period" to return the policy for any reason. Here is how to fight back.
Disclaimer: Free Look rules apply to Life Insurance and Health Insurance policies with a term of 1 year or more. It usually does not apply to Car Insurance.
Regret Buying That Policy?
1. What Is the Free Look Period? (2025 Update)
The Free Look Period is a trial period mandated by the IRDAI. It starts from the day you receive the policy document.
⏳ Good News: It's Now 30 Days!
Previously, offline policies only had 15 days.
However, under the latest IRDAI Master Circular (2024), the Free Look Period has been extended to 30 Days for ALL policies, whether bought online or offline.
Crucial Warning (The Digital Trap): The countdown starts when you receive the document electronically (Email/WhatsApp) or physically, whichever is earlier. Do not wait for the postman if the email has already arrived!
2. Will I Get 100% Refund?
Almost. The insurance company will refund your premium, but they are allowed to deduct three things:
- Pro-rated Risk Premium: The cost of insurance cover for the few days the policy was active.
- Medical Examination Costs: If they paid for your health check-up, they will deduct that cost.
- Stamp Duty Charges: The government fee for issuing the bond.
Example: You paid ₹20,000.
Deductions might be ₹500 (Risk) + ₹1,000 (Medical) + ₹100 (Stamp).
Refund: ₹18,400.
This is much better than losing the entire ₹20,000 or getting stuck in a bad plan for years.
3. How to Cancel (The Right Way)
Do NOT just call your agent. They will stall you until the 30 days are over.
Follow this formal process:
- Step 1: Visit the nearest branch or download the "Free Look Cancellation Form" from their website.
- Step 2: Fill out the form. You do not need a "valid reason." Just write: "Terms and conditions not acceptable."
- Step 3: Submit the policy document and a cancelled cheque (for refund).
- Step 4: Get an Acknowledgement Receipt with the date stamped. This is your proof that you applied within the time limit.
4. The "ULIP" Risk
If you bought a ULIP (Unit Linked Insurance Plan), the refund amount depends on the market (NAV).
- If the stock market crashed between the day you bought and the day you cancel, you will get back the current fund value (which might be less than your premium).
- If the market went up, you might get back slightly more!
5. What If They Reject My Request?
If you submitted the request within the Free Look Period but the company delays or rejects it, you have powerful options:
- Email the company's Grievance Redressal Officer (GRO).
- If no response in 15 days, file a complaint on the IRDAI Bima Bharosa Portal (toll-free 155255).
- Contact the Insurance Ombudsman (they settle claims up to ₹30 Lakhs).
Don't Settle for a Bad Policy
Insurance is a long-term commitment. Don't spend the next 20 years paying for a mistake you made yesterday.
If you have any doubts about a new policy, act NOW. Once the Free Look Period expires, exiting becomes very expensive (surrender charges).
Action Plan:
- Check your Email and SMS. Did the policy document arrive digitally? (Start counting from that date).
- Read the "Benefit Illustration" page. Is it what you were promised?
- If not, go to the branch tomorrow with your cancellation request.
Helpful Resources:
IRDAI Policyholder's Handbook
Bima Bharosa: File a Complaint Online
0 Comments