Read the fine print before accepting insurance policy

It is advisable to read the policy document carefully before and after buying insurance, but most people ignore it. After buying insurance, you must read the policy document carefully at least once. Suppose while reading the policy documents, you come across some conditions which were not told earlier, then you get confused as to what to do now.

Let us tell you what to do. On buying a policy, you get a free-look period.  What is this free-look period, how many days is it and how can you cancel the policy if you don’t like it. Let’s know.

What is the free-look period?

New policyholders are given 30 days to read and understand the terms and conditions of the insurance policy. This is called the free-look period. The purpose of which is to protect the interests of the customers. If you are not satisfied with the terms of the policy, then you can cancel the policy within 30 days and get the money back. Insurance regulator IRDAI has increased the free-look period from 15 to 30 days for new insurance policies from April 1, 2024.

Free-look period is available in the case of both health and term insurance. But how should one use this 30-day window? What things are to be checked in the health insurance policy, how will you know whether the policy fits your needs and financial goals or not. Let us have a look here.

1. Read the terms and conditions of the policy document carefully. Pay attention to the exclusions included in the policy i.e. the things that are not covered in the policy.

2. Check the waiting period for pre-existing diseases and specific diseases.

3. Look at the sub-limits and co-payment terms of the policy. This will tell you how much money the insurance company will pay for the treatment of a disease or medical service and how much you will have to spend out of your pocket.

4. Compare the promises made by the agent or the company while selling the insurance with the terms of the policy.

5. You can take the help of an insurance expert or financial planner to understand the terms of the policy better.

6. Based on your understanding and professional advice, decide whether the policy meets your needs and financial goals or not.

How can you cancel the policy

If the health insurance policy does not meet your needs or the claims made while selling the policy do not match the terms of the policy, you can start the process of cancelling the policy. To cancel the policy, you will have to request the insurance company in writing with the policy document, copy of ID proof and the reason for cancellation.

Apart from the free-look period, you can cancel it even while the policy is in force. Insurance regulator IRDAI recently issued a master circular. The circular states that the policyholder can cancel his health policy at any time during the term by giving a written notice of 7 days. In a case where the policy term is up to one year and no claim has been made,  the insurance company will refund the proportionate premium for the unexpired policy period. Similarly, for policies longer than one year, the company will refund the premium for the remaining policy period.

Don’t just buy insurance but also read the terms of the policy. If not satisfied, instead of carrying the policy, return it by taking advantage of the free-look period. One more thing. The free-look period of insurance does not start from the date of purchasing the policy but from the day the policy is received by you.