Regretting Your Policy Purchase? Free Look Period in Insurance Lets You Exit in 30 Days
The policy sounded perfect when you bought it. Then the document arrived, and the fine print told a different story. That moment of doubt is more common than most people admit. That is exactly why the free look period in insurance exists.
You get 30 days from receiving the policy document to review it carefully and cancel without surrender penalties if it does not match your expectations.
Here’s everything you need to know about the free look period in insurance in 2026.
What Is a Free Look Period?
The free look period in insurance is a 15 to 30-day window from the receipt of policy documents that allows policyholders to review terms and cancel, return, or modify the policy without penalties.
It applies to all new life insurance and health insurance policies. If cancelled, a refund is issued after deducting proportionate risk premiums, medical exam costs, and stamp duty.
In India, the Insurance Regulatory and Development Authority of India (IRDAI) mandates this provision across life and health insurance categories under Section 20 of the IRDAI (Protection of Policyholders’ Interests and Allied Matters of Insurers) Regulations, 2024.
Free Look Period Duration: Current Rules as of 2024 Onwards
IRDAI increased the free look period for new insurance policies from 15 days to 30 days, effective April 1, 2024, providing policyholders more time to carefully review their policy documents and cancel if not satisfied with the terms and conditions.
What Is the Purpose of the Free Look Period?
The primary purpose is to address information asymmetry in insurance sales.
- Review the full contract properly
Gives you time to read the benefits, exclusions, charges, and riders after receiving the policy document.
- Protect against mis-selling
Allows you to exit if the written terms do not match what was explained at the time of sale.
- Cancel without surrender penalties
You can withdraw within 30 days and receive a refund after minor deductions such as stamp duty or medical costs.
- Strengthen consumer rights
Ensures the final decision happens after full disclosure, not during a sales conversation.
It directly targets the problem of mis-selling.
According to IRDAI’s annual report for FY24, grievances reported on unfair business practices against life insurers reduced to 23,335 from 26,107 in FY23, with the share of such grievances declining from 21% in FY23 to 19.3% in FY24. The free look period is part of the regulatory toolkit that supports this trend.
How the Free Look Period Works
Here is how the free look period in insurance works-
Step 1 — Receive the policy document. Your 30-day period begins from this date. If the document arrives by post, the date of receipt is counted from when you actually receive it.
Step 2 — Review thoroughly. Go through the coverage terms, exclusions, premium schedule, riders, claim process, and surrender value clauses. Compare with what was communicated at the time of sale.
Step 3 — Decide to cancel. If the policy doesn’t meet your expectations, submit a written cancellation request to the insurer within the 30-day window. Most insurers accept this via email, physical letter, or their app/portal.
Step 4 — Submit supporting documents. Typically, you’ll need to attach the original policy document, a cancellation request letter with reason, and your bank details for refund processing.
Step 5 — Receive the refund. Insurers are required to process cancellation requests and refund premiums within 7 days.
How Much of the Premium Do You Get Back?
You don’t get a 100% refund in most cases. Upon free look cancellation, the insurer refunds the premium after deducting charges like stamp duty, medical exam fees, and a proportionate risk premium for the coverage period.
In practice, since most free look cancellations happen within the first few weeks after purchase, the proportionate risk deduction is small. The refund is usually close to the full premium paid.
Free Look Period in ULIPs
Unit-Linked Insurance Plans (ULIPs) are a special case because part of the premium is invested in market-linked funds. The refund calculation here has an added variable — NAV (Net Asset Value).
For linked insurance products, in addition to the standard deductions, the insurer is entitled to repurchase the units at the Net Asset Value on the date of cancellation.
This means if the market has fallen between the date of purchase and the cancellation date, you may receive less than the premium invested in the fund component — not because of any penalty, but because of market movement.
Example of free look period-
Say you buy a ULIP and pay a first-year premium of ₹1 lakh. After allocation charges, ₹90,000 gets invested in equity funds. If the NAV drops 5% by the time you initiate free look cancellation, the fund value comes to ₹85,500. After adding back non-invested deductions and subtracting the standard charges (risk premium, stamp duty), your refund would be lower than ₹1 lakh.
This is something most buyers don’t factor in. The free look period isn’t a completely risk-free exit for ULIPs.
It is only insulation from surrender penalties and lock-in charges.
What are the Benefits of the Free Look Period
Protection from mis-selling. The most direct benefit. If the policy was sold with promises that aren’t reflected in the actual document, this is your exit route without financial loss.
Time to compare. Thirty days gives you room to revisit the policy alongside alternatives in the market. What seemed like a good deal at the point of sale may not hold up after a careful second look.
No questions asked (mostly). You can cancel for any reason. Insurers are not permitted to decline a free look cancellation request. They may reach out to resolve your concerns, but the final decision rests with you.
Applies regardless of purchase channel. Whether you bought through an agent, a bank, a web aggregator, or directly from the insurer’s portal, the 30-day rule applies uniformly as of April 2024.
Are there any Limitations of the Free Look Period?
The free look period protects you, but not completely.
Here are the Free look period limitations you should know-
It’s a one-time window. The free look period applies only at the time of policy inception. If you renew an existing policy or buy a new plan years later, the 30-day option applies only to that new policy at issuance.
You don’t get another chance to exercise it on an ongoing basis.
Doesn’t apply to short-term policies. For health insurance, the free look period is applicable for policies with a term of at least three years. Single-year health plans are excluded.
Market risk in ULIPs still applies. As explained in the ULIP section above, the free look period insulates you from administrative charges, not from mark-to-market losses.
Doesn’t cover group policies. Free look provisions are generally applicable to individual policies. Group insurance plans issued through employers or associations are typically outside this scope.
Minor deductions are unavoidable. Even after a clean free look cancellation, deductions for stamp duty, risk premium for the cover period, and medical examination fees (if applicable) will be made. The refund isn’t a full reversal to zero.
What’s Changing: The Push for a 1-Year Free Look Period
In February 2025, the government signalled a desire to extend this window dramatically. Finance Minister Nirmala Sitharaman announced that the government has asked insurance companies to extend the free look period from the current one month to one year, aimed at protecting policyholders from mis-selling and ensuring they have ample time to review their insurance agreements.
However, this is still a proposal and not a regulatory measure. Before these changes come into effect, legal amendments will be required.
As of early 2026, no formal IRDAI circular has implemented the one-year extension. The current enforceable standard remains 30 days as mandated from April 1, 2024. Policyholders should not assume a longer window is available until the regulatory change is formally notified.
Bottom Line
The free look period is one of the more practical consumer protections in Indian insurance regulation. If you’ve recently bought a life or health insurance policy and the document doesn’t match what the agent described, your 30-day window is the cleanest exit available.
Know the types of riders in insurance!
Free Look Period in Insurance – FAQs
As per Rule 20 of the IRDAI (Protection of Policyholders’ Interests and Allied Matters of Insurers) Regulations, 2024, every policyholder gets a free look period of 30 days starting from the date of receipt of the policy document.
A 30-day free look period applies to both life and health insurance policies, allowing policyholders to review the policy terms and conditions.
It covers your right to exit the policy and get a near-full premium refund after review. If not satisfied with any of the terms and conditions, you have the option to cancel the policy.
The 3-year rule is specific to health insurance. The free look period applies to all life insurance policies and some long-term health insurance plans with a minimum tenure of three years
The minimum free look period is 30 days from the date of receipt of the policy document, applicable regardless of acquisition mode
Yes, and you don’t need to give a specific reason. You can cancel your insurance policy during the free look period for any reason if you are dissatisfied with the terms or conditions of the policy.
You lose the option entirely for that policy at that stage. There is no grace period or extension once the 30-day window closes.
The core benefit is protection from mis-selling. The free look period gives you valuable time to review your policy documents thoroughly after purchase, allows you to examine the policy’s features, inclusions, and exclusions at your own pace, and enables you to analyse the policy terms.
Yes, for all life insurance policies and health insurance policies with a minimum tenure of three years.
The free look cancellation applies only if the insured has not made any claim during the free look period. If a claim has been filed, the policy cannot be cancelled under free look provisions.
From the date you physically or electronically receive the policy document, and not from the date of premium payment or policy issuance. Keep a record (delivery email, courier tracking) of when you received it.
Insurers are required to process the refund within 7 days of the cancellation request. Delays beyond this are a regulatory violation and can be escalated to IRDAI’s grievance redressal portal (Bima Bharosa) or the Insurance Ombudsman.
No. It applies only at the inception of a new policy.
No. Insurers are not permitted to reject a valid free look cancellation request made within the stipulated period, provided no claim has been made.
