Free-look Period in Insurance Products Increased to 30 days

The Insurance Regulatory and Development Authority of India (IRDAI) has made it compulsory for life insurance savings to have the option of loan against the policy to enable policyholders to satisfy their liquidity requirements.

The regulator increased the free-look period which gives customers a chance to check the terms and conditions of their life insurance policies from 15 days to 30 days, according to the circular for life insurance products that was released on 12th June, 2024. 

A free-look period refers to the period in which a policyholder can cancel their insurance policy without the requirement of paying for the surrender charges. 

According to the master circular, policyholders can now meet their unique financial needs for significant life events like marriage or a child’s further education by using the partial withdrawal provision under pension schemes. Regarding surrender value, the circular states that both continuing policyholders and policyholders who are surrendering their policies shall be guaranteed reasonableness and value for money in the event of a surrender.

The IRDAI’s broader goal of reforming the insurance industry includes various circulars.  “A conducive environment is now facilitated to spur innovation, enhance customer experience and satisfaction. Boards of Insurers are now enabled to decide on various business aspects to quickly align their strategies to the changing market requirements,” said IRDAI in a statement.