What is a free look provision in life insurance?

Every state in the US and the District of Columbia requires life insurance policies to include a free look period. Regulations vary from state to state, as does the required length of the free look period. However, there's always a minimum 10-day free look period and a max life insurance free look period of 30 days. 

Ethos is a licensed producer and third-party administrator for several of the most well-respected life insurance companies in the United States. We work with top-rated carriers, including Legal & General America, TruStage, and Ameritas Life Insurance Corp, which carry at least an A rating from A.M. Best for financial stability. 

Although the duration of the free look period may vary by carrier, every policy purchased through Ethos is backed by a 30-day money-back guarantee. 

How do I cancel my policy during the free look period?

If you decide to cancel your policy during the free look period, simply email or call us at (415) 322-2037 to request a surrender form. Customer service representatives are available Monday through Friday from 8 am to 6 pm central time. We'll process your request immediately and issue a refund for the total amount paid.

If you decide to cancel your term life insurance policy after the 30-day free look period expires, you may either request a surrender form or stop paying your premiums, which will cause the policy to lapse. For whole life insurance policies where cash value has accrued, be sure to complete and submit the surrender form. 

You don't have to worry about any cancellation fees after the free look insurance review period ends.

Learn more and apply today

A life insurance policy free look period provides you with the confidence to protect your loved ones today even if you don't have time to study all of the policy's details. With 30 days to review, you can consult your attorney, financial advisor, or any other trusted resource regarding the insurance company and Ethos's free look provision. 

Learn more about online life insurance and how much coverage you should have to secure your family's financial stability in our Life Insurance 101 overview. When you're ready, get a fast, free quote on our website.

But the company can extend the free look period up to 30 days as per the rules. The benefit allows cancelling your life insurance policy within a specific window by contacting your insurance provider. Now you know about the free look period meaning, read about its purpose.

What is the Purpose of a Free Look Period in an Insurance Policy?

The free look period is a consumer-friendly initiative that helps you make an informed choice while buying an insurance policy. It serves the following purposes:

• A free look period provides you with sufficient time to go through the life insurance details in the policy documents. During the free look period, you can understand the policy terms and conditions before choosing to invest in the long term.
• It is possible that after reading the documents, you may find some terms or conditions unacceptable. This may change your mind about the insurance policy, and you may want to cancel it.
• Despite insurance companies making you aware of the terms and conditions, sometimes agents try to sell you policies that are unsuitable for you. However, a free look period offers you the chance to return the policy if you don’t like the terms or conditions without extra charges.
• You can also clear your doubts and confusion within the window instead of terminating the policy after investment.

So, to ensure you understand the policy well and make the best choice, the insurance companies provide free look period insurance.

Essential Things to Keep in Mind

The process of terminating a free-look period of life insurance is quite simple. But you must know the following essential points before terminating a policy:

• Asking the insurer about the free look period: Insurance companies do not offer a free look period on all health insurance plans. In some health plans, the benefit of a free look period is provided only when the policy has 3-year tenure. So, ensure you read the policy documents or ask the insurance provider about the same.
• Keeping time limit in mind:  The free look period is usually up to 15 days after you receive the physical documents. So, you must remember the date when you received the documents to avail of the benefit.
• Requesting cancellation: To request policy cancellation, you must request in writing to the insurance provider within the free look period. You can also fill up a cancellation form on the insurance company’s website.
• Providing details: After the cancellation request, the insurance company may ask you to furnish details such as when did you receive the policy document, reasons for cancellation, information about the agent, etc.
• Providing the documents: The documents required to complete the cancellation procedure are the policy contract, receipt of the first premium and a cancelled cheque.

What About the Refund?

Upon policy cancellation within the free look period, the insurance company doesn’t refund the entire premium amount. However, it may make the following deductions:

• The charges for the stamp duty.
• In health insurance policies, the insurer bears 50% of the costs of the medical tests, which the company deducts from the premium.
• A proportionate premium for the coverage duration.

A Step-By-Step Guide to Cancelling a Policy Within the Free-Look Period

• Check if you are eligible for a free look period. In the case of some health insurance plans, the benefit is offered if the policy tenure is of 3 years.
• You can request policy cancellation online or offline with reasons for cancellation.
• After the cancellation request, submit the required documents to start the process.
• After verification of your application, the insurance company will cancel your policy and refund the amount after certain deductions.

What Happens if You Cancel Your Policy After the Free Look Period?

You can still end your insurance policy after the free look period ends through a surrender. Usually, the premium is written off as surrender charges if you cancel the policy in the first year. But, if you prepaid the premiums, the insurer will deduct the premium of coverage duration and refund the remaining amount.

Conclusion

You must make the best decision while buying an insurance policy, and a free look period ensures the same. Now that you are familiar with the free look period definition, you need to check for eligibility and make the most of this benefit. If you are not comfortable with some provisions of the policy, you can cancel it at the right time instead of getting locked for the long term. Also, by reviewing the terms and conditions during the free look period, you can avoid inconvenience during the claim settlement process.

With growing uncertainties, life insurance has become a necessity of life. Life insurance gives a protective cover to your loved ones if anything unfortunate happens to you. You can also fulfil several life goals and dreams of your family by investing in the right life insurance plan at the right time.

Tata AIA Life offers the best policy options and advice for life insurance. With tailored Tata AIA life insurance plans, you can choose a policy that is most suitable for your needs. So, buy the right life insurance online today and build a financially secure future for your loved ones.

L&C/Advt/2022/Jul/1662

Page 2

The importance of life insurance has now made people understand the need for financial planning and how savings and insurance can satisfy their needs. We should identify our long-term objectives, financial commitments, and ways to protect our family's financial well-being at all stages of life. 

What is Life Insurance, and why is it necessary?

Life Insurance is a contract between an individual and an insurance company. The individual pays premiums to purchase life insurance. Life insurance acts as a financial cover and is given as the sum assured. There are a variety of insurance products available. Based on the type of plan chosen, the insurer will pay the lump sum amount to the policyholder when the plan matures or to the nominees if the policyholder dies. 

It is necessary to provide for all the financial obligations in the absence of the earning member. The sum assured can be used to manage daily expenses, settle debts, and meet long-term plans and important milestones such as children's education, marriage, career ventures etc. 

Facts to consider

Here are some basic facts that you need to know about life insurance. It is important to consider these facts while purchasing a plan.

1. Premium 

   The premium amount is the regular amount you pay to the insurance company corresponding to the sum assured. It is based on your age, lifestyle and any pre-existing illness. The insurance company will consider the above and use a statistical method to calculate the risk involved in the death.

   The life insurance premium rate will be based on this factor. It is best advised that you purchase life insurance at a younger age, perhaps when you start earning. It has the advantage of a low premium amount as health is robust. You can pay the premium amount in a comfortable frequency such as monthly, half-yearly or annually.

2. Sum Assured

   It is the amount that you get as a lump sum when the policy matures or as a death benefit to the family members. It cannot be any random amount. Make sure you consider all the expenses associated with you and your family to derive the value.

   Based on your lifestyle and food habits, you can arrive at the monthly expenses. Add other liabilities such as education loans, home loans etc. Also, add your long-term objectives such as children’s education, marriage, career etc. Subtract the amount you will be able to pay as liquid cash through other savings and investment proceeds. The value derived will have to be your life coverage. Choose insurance plans based on the policy tenure you can afford so that the computed sum assured gets you the best benefit.

3. Death and Maturity Benefit

   There are two types of benefits in insurance. The death benefit is the sum assured provided to the family in the case of the policyholder's death. It is the basis of a term life insurance policy.

   In savings or investment-based life insurance plans, the maturity benefit is provided to the policyholder if he outlives the policy term or the nominees if he dies unexpectedly.

   For example, with guaranteed1 return insurance plans, you can pay premium amounts to get the sum assured along with guaranteed1 additions. The amount can be received as a lump sum, a combination of lump sum and regular income or regular monthly income for a specific period of time.

   Choose the best insurance plan that will suffice your needs appropriately. 

4. Riders#

   Generally, people believe that insurance will pay the sum assured to the family members upon the insured person's death. However, there are additional riders# that can enhance the plan and increase the coverage of sum assured.

   For example, the accidental benefit rider# will make the amount payable when the insured person dies due to an accident as against natural death. The terminal illness or the critical illness rider# will ensure the amount payable when the policyholder is first diagnosed with the illness. Other riders# also waiver future premium payments when the policyholder gets affected due to a total and permanent disability. Tata AIA plans offer a variety of riders# to increase the insurance benefits. 

5. Tax* Benefits

   According to the Income Tax Act of 1961, the premium paid towards life insurance plans qualifies for a tax* deduction. As per Section 80C, the annual premium paid up to Rs. 1,50,000 is eligible for deduction while calculating the taxable income. In addition, the return of premium on term plans is exempted from income tax* under Section 10 (10D). There are terms and conditions associated with every plan. Read the policy document before you make a decision.  

6. Investment Benefits

   A basic life insurance plan is not essentially an investment. It will serve as a savings plan for your family members and provide financial security under your unexpected demise. However, the insurance industry has increased the investment options with life insurance plans. Unit Linked Insurance Plan is an endowment plan, wherein one part of the premium goes for the life coverage and the other for investments in equity, debt or hybrid funds. 

Conclusion

We have seen what life insurance means, why it is important, and the six important facts that you should know. By planning your financial expenses and income, you can allocate a budget towards paying your monthly premium. There are a variety of plans available to ensure your financial security.

Analyze your plan, check the different products available and compare life insurance policies. Research, customize and avail the best product based on your premium paying capacity. Finally, plan and invest early so that you get discounted premiums, and a large sum assured. Keep these six facts in mind while you get your first insurance policy!

L&C/Advt/2021/Sep/1605

Page 3

 “Health coverage is a must!”

“Why don’t you go for a ULIP plan?”

“Simply get life insurance.”

Do these words sound familiar to you? As a young adult, you get varied answers from people when you ask them about the kind of insurance you should buy. From term plans and health covers to a ULIP policy and general insurance, there are several types of life insurance policy available today.

It is easy to get lost in the pool of options and advice when you are new to insurance. If you are planning to get insurance but are confused about where to start, we have got you covered. In this article, we discuss four types of insurance policy that young adults like you must consider buying.

Term life insurance

Life is unpredictable. Plus, with so much going on around the world, having life insurance is more important now than ever. A life cover provides financial security to your loved ones when you are not around. This is especially crucial if you are the only breadwinner, as you don’t want to leave your dependents in a financial crisis after you have gone.

Term insurance is one of the several types of life insurance policy in India that is great for you. The purest form of life insurance, a term policy promises a death benefit to your loved ones in the unfortunate event of your demise. It pays a lumpsum amount to the beneficiary if you die while the policy is still in force. It covers you for a specific number of years after which it expires.

Typically, term insurance comes with a substantial amount of coverage for your loved ones at low premiums. This makes it an affordable life insurance option for young people like you who are in the nascent stages of their career and life.

ULIP investment

A ULIP plan or a Unit Linked Insurance Plan is one of the types of life insurance policy in India that offers dual benefits of insurance and savings. Unlike term life cover, these plans are designed keeping your dreams as well as financial security in mind.

If you are not the sole income bearer and leaving behind a legacy is not your concern at the moment, then ULIP policy can be ideal for you. A part of your policy premium goes towards insurance, while the remaining is invested in market-linked securities. You get the option to choose the type of security you wish to invest in, ranging from equity, debt to balanced funds.

ULIP investment plans act as an income tool to help you fulfil your life goals. Whether your goal is wealth creation, a child’s education, marriage, or retirement, you can pick products that are the most suitable to your dreams. In case of death during the policy tenure, the fund value or sum assured, whichever is higher, is paid to your nominee.

ULIP charges or premiums are higher as compared to term plans, but it also offers a cash value in addition to life coverage.

Health insurance

Whether you hit the gym every day, meditate regularly, or make healthy food choices, an unforeseen event of an accident, permanent disability, or chronic illness is enough to leave you and your family under financial stress. In times when chronic diseases are on the rise and a day spent at the hospital can cause your savings to drain, health insurance is a crucial part of your financial plan.

The earlier you buy one, the better it can be, as you pay a lesser premium when you are young and healthy. Health insurance provides a comprehensive cover against various medical and surgical expenses. From hospitalization charges to critical illness, death and disability, it secures you against hefty charges that are a result of unforeseen health problems.

Most covers like critical illness or accidental death and disability are also available as riders# with your term or ULIP plan. Since health problems come without warning, you might want to consider buying a health cover at the earliest.

Retirement insurance plans

Who doesn’t dream of a comfortable life in the later years? Even though you are focused on growing in your profession at present, you might slip into thoughts of how your golden years are likely to be. This is why a retirement plan should be a must on your list of types of insurance policy to buy.

Retirement plans enable you to create a financially sound future post-retirement. They help you save money for a long period use it in your later years. In such a plan, you pay a specific amount of premium on a regular basis till the plan matures. The amount is then paid to you as regular income, pension, or annuity at periodic intervals as per your choice. You can choose from several retirement insurance plans like guaranteed1 return insurance plans, guaranteed1 Income plans, annuity pension plans, etc., to secure your future. Moreover, apart from guaranteed1 returns post-retirement, you also get insurance coverage to secure your dependents’ future.

Tata AIA Life Insurance

Tata AIA Insurance provides a range of life insurance plans to suit various needs and budgets. Choose from:

• Term Insurance

• Savings Solutions

• Wealth Solutions or ULIPs

• Retirement Plans

For more information, get in touch with our advisors today.

Conclusion

Becoming financially independent requires thorough planning from an early age. A full-fledged term plan, health cover, ULIP policy, or retirement plan can be a critical part of a healthy financial plan.

Prioritizing insurance when you are young enables you to reap several advantages, including lower premiums, fewer exclusions, and better savings. So, make sure to consider your lifestyle, health history, number of dependents, earnings, debt, and financial goals while picking the right insurance policy.

L&C/Advt/2021/Jun/0905

Page 4

Even though people understand the importance of taking these plans, they commit some common mistakes while taking these life insurance plans.

Here are some of the mistakes that must be avoided while taking a life insurance plan.

Life insurance mistakes you must avoid:

1) Delay in taking a plan:

Sometimes you tend to overthink and delay deciding on life insurance for a long time. You may keep looking for plans that offer maximum benefits. While taking time to know the best plans is not wrong, delaying it by not deciding is the issue.

Remember that taking a life insurance plan is a sure shot way to protect your family from uncertainties. No age is too early if you have started earning in your life. Hence, do not delay taking a life insurance plan for any reason whatsoever.

2) Improper/incomplete disclosure of information:

The premium for covering you with life insurance is ascertained by the information you disclose during the policy's inception. Usually, details like age, profession, family history, pre-existing illnesses, disabilities, habits like smoking, alcoholism, etc., are asked during the policy's inception.

The answers you provide concerning these questions would decide the premium and underlying risk for the insurance company. Giving any wrong information or even incomplete disclosure of facts will lead to the rejection of any future claims. This would defeat the entire purpose of taking life insurance.

So, you must provide truthful information and disclose any information that is necessary to the insurance provider.

3) Relying only on your company’s insurance:

If you are working as an employee, you are probably covered by the company's group insurance policy. Relying only on the company's group insurance would be a big mistake and should be avoided for two reasons.

• Unless you are in top positions of the hierarchy, the sum assured for these policies is comparatively very little.
• There is always a possibility of job loss or taking a career break due to any uncertainties.

4) Taking a policy with less sum assured:

One factor that affects the premium charged for a life insurance policy is the sum assured that you want the insurance provider to cover you with. It would help if you always calculated your expenses and future liabilities that may arise and accordingly take the sum assured.

You can take a sum assured up to 15-20 times your annual salary. Taking a higher sum assured could cost you a higher premium for now, but rest assured your family would be safe from any uncertainties of your death.

5) Buying plans with a shorter duration:

One of the Insurance mistakes people commit is making plans with short duration. If you make a plan at an early age, like 25 years, and choose the policy term for 25 years, you can no longer continue the term plan when you turn to the age of 50 years.

You would then need to start a new term plan which might be very expensive to start at that age. Besides, you do not face challenges relating to health at an early age. Many of the problems start at old age, and hence you should choose a plan with longer durations.

6) Faith in only one insurance provider:

You might come across people who advise on taking insurance plans from public sector insurers, etc. Always choose the insurance provider that has a higher claim settlement ratio and offers better customer service.

It would be best if you also considered the financial stability and reputation of the insurance provider while deciding which company to opt for. Also, compare premiums of different plans before finally deciding which one to take.

7) Taking a plan that you don’t understand:

Life insurance plans are essentially a contract between you and the insurance company. As in all contracts, there are terms and conditions. Even the life insurance policy has many. The policy document contains detailed conditions and features of the plan by which the insurance plan is governed.

Read the policy document carefully and consult the company for any clarifications that you may deem necessary. It is always better to take a policy that you completely understand.

8) Reservations about taking online plans:

If you are one of those who insist on taking insurance plans from an agent – you might be losing a lot of features and ease of access that insurance companies provide these days. With the advent of the internet and eCommerce, everything has changed with the way we buy things these days. Buying online insurance is very easy and safe. Companies even provide discounts for buying plans online these days.

9) Mistakes while providing details:

One of the common mistakes you might make while buying insurance plans is making mistakes on the insurance application form. The details you provide are very important as they would directly affect the claim settlement if any arises. Giving correct nominee details is most crucial while taking insurance policy because ultimately it is them who need to be benefitted by taking these policies.

Some pointers while taking life insurance plans:

• Compare premiums of policies before choosing the insurance provider.
• Take a higher sum assured that could cover your family’s expenses for the long term.
• Read policy documents for clarity on conditions and features of the plan.
• Provide correct information in the insurance application.
• Buy an online plan for ease of access and superior customer care experience.
• Choose companies with financial stability and a good reputation.
• Disclose all the information relating to any habits of smoking, pre-existing illness etc.

Looking to buy life insurance plans?

If you are looking for an extensive life cover for long-term coverage and at affordable premiums, you can consider a pure term life insurance plan. Term insurance plans are pure insurance plans that offer a predetermined sum assured to the nominee in case of your demise.

Buy Tata AIA term insurance plans at ease and protect your family from any difficulties after your death. You can get access to all the plan features online and can compare different policies in one place. You can even avail the benefit of the online term insurance premium calculator to ascertain the premium amount.

Get Tata AIA Life Insurance and protect your family’s financial future with flexible premium payments, policy terms, and other features.

L&C/Advt/2021/Aug/1326