Show
Whether you’ve found a better policy, want to work with a different carrier or are just experiencing buyer’s remorse, you can reconsider your life insurance purchase after you’ve signed the paperwork thanks to the free look period. This provision essentially lets you take your policy for a trial run, during which you can cancel it with no penalty. If you’ve recently purchased coverage or are planning on doing so, this review outlines what you need to know about the free look period for life insurance. If you're shopping for life insurance policies, you can compare plans online for free or call to speak with a licensed insurance agent who can help you compare free quotes and apply for the right plan for your needs. What Is the Free Look Period for Life Insurance?The free look period is a designated period of time during which a new life insurance policyholder may cancel the policy without incurring surrender charges or other penalties. As long as the policy is cancelled within this timeframe, the purchaser receives a full refund of any premiums they’ve paid. This period of time, which is mandated by every state, is sometimes referred to as the free examination period. How Does the Free Look Period Work?Although a life insurance policy is a binding legal contract that assigns rights and responsibilities to both the policyholder and the carrier, the free look period provides a way out for purchasers who’ve changed their mind about the purchase. During this free examination period, life insurance policyholders have the opportunity to review the terms and conditions of their coverage to decide if it's the right plan for their needs. At any point during this period, a policyholder may opt to cancel their life insurance plan without penalty. If they do so, the insurer must issue a full refund of any premiums paid. The request to cancel may be done by a telephone call to your insurance agent or directly to the insurance company. If your insurer needs the request in writing, they'll let you know at this time. If you opt to continue your policy at the end of the free look period, there’s nothing else you need to do. Simply pay your premiums and your policy continues, uninterrupted, per your agreed-upon coverage terms. How Long Is the Free Look Period?This free examination period typically lasts for 10 to 30 days, depending on the individual carrier and the state of issue. The countdown for this trial term may begin on one of three days:
Details of the free look period, including the timeframe for penalty-free account cancellation, are specified in the policy’s terms. Your insurance agent or a company representative can also advise you about the specifics of your policy’s free examination period. Do All Insurers Offer Free Look Periods?Although not every type of insurance policy comes with a free look period, all life insurance policies do. Free look periods for life insurance are currently required by the state insurance departments of all 50 states and the District of Columbia. Legislation varies from state to state, including guidelines for time limits on cancellation and the types of policies for which free look periods apply, so contact your state’s insurance department for information on local regulations. Can I Cancel My Insurance and Get Money Back After the Free Look Period?You can cancel your life insurance policy at any time. A request to terminate your coverage may be submitted over the phone, by email or in writing to your agent or the issuing company. Most term life policies can also be terminated by stopping premium payments and letting the policy lapse. With most plans, once your free look period has ended, you probably won’t receive a refund for premiums you’ve already paid. However, if you specify, in writing, a date when cancellation is to be effective, the company may return unused premiums. Policyholders who have coverage through whole life plans, which combine insurance with an investment component, may receive cash back upon cancellation. However, the amount you receive, which is considered the cash value of the policy, may be subject to taxes and fees. If you’re thinking of cancelling a whole life policy, it’s important to submit a formal request for termination of coverage through your agent or a company representative. You can do so by asking to be paid the cash surrender value of the policy. If you opt to simply stop payments, the policy’s cash value will continue to fund premium payments until it runs out and you will receive no money back. Do I Have to Pay a Fee to Cancel My Policy?Cancellation fees may apply to certain types of policies. If you have a permanent life insurance policy, you’ll probably incur a penalty for cancelling. However, whether you’re assessed a fee may depend on several factors, including the type of coverage and how long you've had the policy. Are There Alternatives to Cancelling Unwanted Life Insurance Coverage?One alternative to cancelling unwanted life insurance coverage is to sell your policy to a third-party buyer. These parties typically purchase policies from older policyholders or those with serious health issues, offering a cash payout for the plan. They continue to pay premiums on the policy and become the new beneficiary, receiving the death benefit when you die. If you’re thinking about selling your life insurance policy, there are several things you should consider:
Reducing or cancelling your coverage may ultimately be a better option for most policyholders. Where Can I Get Help?Whether you’re ready to purchase a life insurance policy or you want to cancel a plan you already own, you may need help with the transaction. A reputable agent or broker can help you navigate the ins and outs of the free look period for life insurance and other complex topics. Most insurance companies also maintain a customer help line where trained representatives are available to answer questions and help consumers make informed decisions. Learn more by comparing life insurance plans online or by calling to speak with a licensed insurance agent. What if you want to switch to a different Medicare Supplement plan, but you’re a little concerned that you might be stuck with the new plan and you might not like it as much as your old one? That’s where the Medicare Supplement free look period comes in. A Medicare Supplement (Medigap) insurance plan can help pay for Original Medicare’s out-of-pocket costs. Different Medicare Supplement insurance plans pay for different amounts of those costs, such as copayments, coinsurance, and deductibles. You may be able to take advantage of the Medicare Supplement free look period, when you can try out a new plan before you drop your current plan. To show you how the free look period works, consider this scenario. You may have signed up for one of the 10 standardized Medicare Supplement insurance plans available in your state but want to switch to a different one. For example, maybe you signed up for Medicare Supplement insurance Plan A (not to be confused with Medicare Part A). Medicare Supplement insurance Plan A may cover: But suppose you decide you want a plan with additional coverage and you think you might travel soon, so you are interested in Medicare Supplement insurance Plan N. Plan N covers the same benefits Plan A covers, as well as: If you want to try out Plan N but also think you might want to keep Plan A temporarily, you can take advantage of the “free look period.” What is the Medicare Supplement insurance plan “free look” period?During the “free look period” you can generally have both your old and new Medicare Supplement insurance plans for a 30-day decision period. You will pay the premiums for both plans for one month so the “free” look is not free in terms of costs. It just gives you the opportunity to try out a new plan without canceling your old plan. Don’t cancel the first Medicare Supplement insurance plan until you’re accepted into the new policy, and you’ve decided to keep this new policy (or the 30 days elapses.) On the application for the new Medicare Supplement insurance plan you will have to promise that you’ll cancel the first policy, as you can only have one Medicare Supplement insurance plan outside of your free look window. Will my application for a second plan be accepted?Keep in mind that if you apply for a Medicare Supplement insurance plan outside your Open Enrollment Period, your application may undergo medical underwriting and it could be rejected. Your Medicare Supplement Open Enrollment Period (OEP) lasts six months and it begins when you’re both 65 or older and enrolled in Medicare Part B. During this OEP, your plan is immune from medical underwriting and you can buy any Medicare Supplement policy from any insurance company that’s licensed in your state. Medical underwriting is the process where insurers look at details about your health history, including medical problems and pre-existing conditions*. The insurance company can use this information to possibly deny your health insurance application, charge you more for coverage, or require a waiting period before providing coverage. Most states offer up to 10 standardized Medicare Supplement insurance Plans labeled A, B, C**, D, F**, G, K L, M, and N. (Massachusetts, Minnesota and Wisconsin have a different way of standardizing their plans.) Although it’s possible to apply for any Medicare Supplement insurance plan at any time, the best time to shop may be when you don’t have to worry about medical underwriting, which is during your Medicare Supplement Open Enrollment Period (OEP) and when you have guaranteed issue. Besides during your OEP, you’re generally given guaranteed issue only under specific circumstances, such as when you move out of your Medicare Advantage plan’s service area or your Medicare Supplement insurance company goes bankrupt. If you apply for a second Medicare Supplement insurance plan outside of Open Enrollment or guaranteed issue, your application may be rejected and you may not be able to take advantage of the “free look“ period. There is no specific amount of time you have to wait after buying your first Medicare Supplement insurance plan before you can switch to a different Medicare Supplement insurance plan. However, if your new policy has a benefit that isn’t in your current policy, you may have to wait up 6 months before that benefit will be covered. *Pre-existing conditions are generally health conditions that existed before the start of a policy. They may limit coverage, be excluded from coverage, or even prevent you from being approved for a policy; however, the exact definition and relevant limitations or exclusions of coverage will vary with each plan, so check a specific plan’s official plan documents to understand how that plan handles pre-existing conditions. **Medicare Supplement Plans C and F, which may cover the Medicare Part B deductible, are being phased out. You won’t be able to buy Plan C or Plan F (including high-deductible Plan F) if you became eligible for Medicare on or after January 1, 2020. If you were eligible before that date, you can still apply for Plan C or Plan F, or keep the plan you already have. A high-deductible Plan G is now available. Plan N pays 100% of the Part B coinsurance, with some exceptions. You may have to pay a copayment of up to $20 for some doctor office visits a copayment of up to $50 for emergency room visits that don’t result in inpatient admission. The product and service descriptions, if any, provided on these eHealth Insurance Web pages are not intended to constitute offers to sell or solicitations in connection with any product or service. All products are not available in all areas and are subject to applicable laws, rules, and regulations. |