Life insurance policy not what you expected? Here's how to cancel it during the 30-day free-look period
For life insurance policies with a term of 1 year or more, the free-look period is 30 days from the date of receipt of the policy document, whether received electronically or in physical form.
- Oct 31, 2026,
- Updated Oct 31, 2026 1:35 AM IST
Buying a life insurance policy is a long-term financial commitment, but what happens if you realise after purchasing it that the coverage, benefits or terms do not match your expectations? Policyholders have an option to reconsider their decision through the free-look period, which allows them to cancel a newly purchased policy and receive a refund, subject to applicable deductions.
Explaining the provision, Nakul Yadav, Chief Actuarial Officer, Aditya Birla Sun Life Insurance, said the free-look period gives policyholders time to review their insurance documents and understand the policy's coverage, exclusions, terms, conditions, premiums and benefits before deciding whether to continue.
What is the free-look period?
For life insurance policies with a term of 1 year or more, the free-look period is 30 days from the date of receipt of the policy document, whether received electronically or in physical form. The provision applies irrespective of the channel through which the policy was purchased.
For instance, if a policyholder receives a life insurance policy document on November 1, they have 30 days from the date of receipt to examine its terms and decide whether to continue with the policy. If they find that the policy does not meet their requirements, they can approach the insurer for cancellation within this period.
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How can policyholders cancel a policy?
Yadav said that if a policyholder disagrees with any of the policy's terms and conditions after reviewing the document, they can return the policy to the insurer for cancellation during the free-look period, stating the reason for their decision.
However, free-look cancellation is subject to applicable conditions, including that no claim has been made under the policy.
How much refund can you expect?
If the policy is cancelled during the free-look period, the insurer must refund the premium paid, subject to permitted deductions.
These may include proportionate risk premium for the period of cover, medical examination expenses incurred by the insurer and stamp duty charges, wherever applicable.
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For linked insurance products, the applicable units are also repurchased at the Net Asset Value (NAV) on the date of cancellation, subject to prescribed deductions.
The insurer is required to process the cancellation request and refund the applicable amount within seven days of receiving the request.
Free-look period is not a trial window
Yadav emphasised that the free-look period should be viewed as a policyholder safeguard rather than a try-and-buy opportunity. He said reading the benefit illustration and policy document carefully before purchasing remains the better approach.
However, if policyholders discover that the coverage, benefits or conditions do not match their expectations, the free-look provision gives them an opportunity to reconsider their decision without going through the regular policy surrender process.
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Buying a life insurance policy is a long-term financial commitment, but what happens if you realise after purchasing it that the coverage, benefits or terms do not match your expectations? Policyholders have an option to reconsider their decision through the free-look period, which allows them to cancel a newly purchased policy and receive a refund, subject to applicable deductions.
Explaining the provision, Nakul Yadav, Chief Actuarial Officer, Aditya Birla Sun Life Insurance, said the free-look period gives policyholders time to review their insurance documents and understand the policy's coverage, exclusions, terms, conditions, premiums and benefits before deciding whether to continue.
What is the free-look period?
For life insurance policies with a term of 1 year or more, the free-look period is 30 days from the date of receipt of the policy document, whether received electronically or in physical form. The provision applies irrespective of the channel through which the policy was purchased.
For instance, if a policyholder receives a life insurance policy document on November 1, they have 30 days from the date of receipt to examine its terms and decide whether to continue with the policy. If they find that the policy does not meet their requirements, they can approach the insurer for cancellation within this period.
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How can policyholders cancel a policy?
Yadav said that if a policyholder disagrees with any of the policy's terms and conditions after reviewing the document, they can return the policy to the insurer for cancellation during the free-look period, stating the reason for their decision.
However, free-look cancellation is subject to applicable conditions, including that no claim has been made under the policy.
How much refund can you expect?
If the policy is cancelled during the free-look period, the insurer must refund the premium paid, subject to permitted deductions.
These may include proportionate risk premium for the period of cover, medical examination expenses incurred by the insurer and stamp duty charges, wherever applicable.
ALSO READ: PM Kisan 24th instalment today, October 30: Check Rs 2,000 payment, eligibility and e-KYC rules
For linked insurance products, the applicable units are also repurchased at the Net Asset Value (NAV) on the date of cancellation, subject to prescribed deductions.
The insurer is required to process the cancellation request and refund the applicable amount within seven days of receiving the request.
Free-look period is not a trial window
Yadav emphasised that the free-look period should be viewed as a policyholder safeguard rather than a try-and-buy opportunity. He said reading the benefit illustration and policy document carefully before purchasing remains the better approach.
However, if policyholders discover that the coverage, benefits or conditions do not match their expectations, the free-look provision gives them an opportunity to reconsider their decision without going through the regular policy surrender process.
DO READ: Insurance or investment? IRDAI’s proposed mis-selling rules put bank-sold policies under the scanner