- You’re On the Clock – You Changed Your Mind About Your Insurance Policy
- February 15, 2017
How long do you have to cancel a new insurance policy
You did your homework, you found the best price for your insurance policy and you were pretty sure you got it all right. But what if you didn’t? What if you change your mind or forgot an important element of your choice of insurance coverage?
There’s still a chance to right whatever you got wrong, but you won’t want to procrastinate.
Once the underwriting process has been completed, it’s customary for your insurance company to send you a hard copy or an electronic copy of your policy which details every aspect and provision included in your coverage. But now you’ve changed your mind and you want to cancel the policy.
Here’s the good news. It’s required by law that insurers offer a block of time called the “free-look” period which allows consumers to cancel their new policy – and get a full refund. Depending on your location in the world, that period of time usually ranges from ten to 30 days with ten days being the standard.
While this law applies to both life insurance and annuity contracts, it may also cover replacement life – a new life insurance policy which has been purchased to replace an existing one – but that depends on your state of residence as well.
Georgia law gives consumers ten days to decide, while in Colorado, the law gives consumers 15 days for life insurance and 30 days for replacement life to change their minds.
In some states, a “free-look” period is offered for health insurance and long-term care insurance, but it again depends entirely on your state of residence. That makes contacting your state’s department of insurance or consulting with your agent to get accurate information a crucial step.
Curious about your state’s “free-look” laws? Then visit the National Association of Insurance Commissioners website. The site provides a service where you can locate the commissioner in your state, and it includes their contact information and a link to your state’s department of insurance website.
But of course, nothing beats taking the time to do your research beforehand to help avoid any complications in the future.
Industry experts often recommend having an attorney review your new policy during this “free-look” period to ensure that your new policy will meet your needs, and it’s always a sensible idea to seek a second opinion if you have any doubts.
As a rule, the period generally begins from the day you receive a full policy back from your insurer.
It also makes sense to follow up with your insurance agent or insurance company to ask any additional questions you may have before the policy becomes official. This is particularly important for you if you purchased a whole life policy. When it comes to a term life insurance policy, you can back out of your agreement at any time – and without facing a penalty.
Bear in mind that the same can’t be said about whole life insurance policies as the penalties for terminating them could run into hundreds of dollars.
To get the best and most accurate information about your insurance needs? The way to begin your search is educating yourself when it comes to the costs and benefits of various policies from a wide range of providers, and you can find the most useful tool to price life insurance policies here…
There are lots of other issues which might arise as you think about whether or not to back out of a new policy; when does the free look period begin, what’s the free look period for an annuity, what’s the free look period for medicare supplement policies, is there a free look period for long term care and is there a free look period for seniors. You can find information about any of those insurance policy issues on our site…
- Category: Articles Library, Life Insurance