Are you considering a term life insurance policy, but are worried that you may purchase the wrong policy? If so, the free-look provision may make you feel more comfortable with your life insurance decision.
How the Free-Look Provision Works
The free-look provision can be thought of as a kind of safety net for your life insurance policy. The free-look provision is a part of every life insurance policy, and provides you with a grace period to review and evaluate your policy. If you experience buyer's remorse, or decide that the policy is not right for you, the free-look provision allows you to get your money back within the grace period.
Each state mandates a free-look period for life insurance policies; however, that length of time varies from state to state. You can find out what your state's particular free-look period is by checking the National Association of Insurance Commissioners (NAIC) website.
If you have already received your final policy, you can find the length of your free-look period on the cover page of your policy.
What to Expect When You Purchase Term Life
When you have been approved for term life insurance, there are a few things that happen:
- You are notified of the rating you have received from the insurance carrier, and any change in premium (should your rating be different from your initial quote)
- You are sent a copy of your policy, and the insurer asks that you sign and return a delivery receipt
- You send in your first premium payment (if you didn't pay up front with your application)
- Once you have signed and returned the delivery receipt, your policy is in force
The date you sign the delivery receipt is important because this is the date that your free-look provision begins.
You should read the contract thoroughly to make sure that everything makes sense, and that the policy you received is the same policy you applied for.
The free-look period is a good time to have an attorney review your new life insurance policy. If your attorney finds anything that could be erroneous or deceptive, you can cancel your policy and continue searching for the right insurance.
You should also contact your agent or the insurance company with any questions you may have after reading the contract.
Affordable Life Insurance
When you shop for term life insurance you want to make sure you are getting the most coverage for your money. Some carriers weigh certain factors more heavily that others, this may include information found during your medical exam or in your medical records.
If you do not receive the rating that you expected, you should continue to shop around for life insurance. By continuing your search for term life insurance, you may be able to get a better rating, with a lower premium from a different carrier.
There are many reasons why a life insurance policy may not be right for you. The free-look provision is there to give you peace of mind in the life insurance process.
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