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What is meant by the 10-day free look period?

Life insurance is a contract between the policy holder and the insurance carrier.  Like all contracts there is a period of time allowed to review the terms of the contract and either agree to accept or decide not to accept.  Life insurance policies typically allow a 10-day free look period to allow the policy holder the opportunity to review and examine the terms of the coverage.  The free look period is offered by almost all life insurance carriers.  If the carrier offers coverage but is not willing to allow a 10-day free look period, you may want to evaluate other carrier options.

The 10-day examination period begins when the policy is received; delivered either by mail or by the broker.  The policy will include the detailed plan specification document explaining in detail the rights and responsibilities of the policy holder.  The plan specification document will provide a clear outline of the length of the coverage (term), the death benefit, and the premium required to maintain the policy.

The policy holder is responsible for reviewing the terms of the coverage offer from the carrier.  If the coverage offer is acceptable, the policy holder does not need to affirm acceptance.  The policy and coverage become active.

If the policy holder does not approve of the coverage offer from the carrier, coverage must be declined with written notification submitted to the carrier.  The written notification should include the statement “policy is terminated as if never in effect.”  This statement protects both the policy holder and the carrier.  The policy holder is clearly communicating that the coverage was not accepted and no assumption of benefits has been made.  Since there is no assumption of benefits, a premium cannot be charged.  The carrier is protected because the intent and wishes of the policy holder are clearly stated.  The carrier has no liability, implied or stated, because the policy holder has terminated coverage and has accepted that it was never in existence.  Obviously, if a premium was paid with the application, a full refund would be issued.  Also, termination of an offer to provide life insurance would not affect one’s ability to apply with another carrier.

The 10-day free look period is a significant benefit to the consumer.  The consumer should take full advantage of the evaluation opportunity and review the coverage to make sure it meets all of the policy holder’s expectations.



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