Every life insurance policy, whether traditional or non-traditional, can be the basic necessity of your life. Although traditional life insurance policies like endowment plans, term policies, etc. have been in the market for a long time, many of you might choose new-age insurance products like a Unit Linked Insurance Plan (ULIP) due to its growing popularity. A ULIP plan is a dual-benefit product, which combines investment and insurance in a single integrated plan.

Although a ULIP plan might offer you numerous benefits, you might be sceptical if it can match your financial requirements. Moreover, you might even buy a ULIP plan because of its low costs and more benefits without running a background check. To help you judge a ULIP policy after the purchase, many insurance policies can provide you with a free look period. Therefore, let’s understand the meaning of a free look period in detail for better clarity:

A free look period is typically the time given to you by your insurer to decide if you want to go ahead with the ULIP policy or not. Under a ULIP policy, the free look period can be for 15 days. During this period, you should read the policy document carefully. As a policyholder, you should go through the terms and conditions, the charge structure, the premium amount, and so forth before deciding to opt for the ULIP policy. If you want to cancel the ULIP policy after the free look period, you should inform your insurance provider to obtain the refund.

The free-look in period can prevent you from paying the premium for a ULIP policy, which fails to meet your financial needs. Therefore, it is imperative to know the working of the free look-in period of a ULIP policy. Let’s take a look below to understand how the free-look in period works:

Although the free look period can help you to decide, you can make use of it only after meeting specific conditions. The free look period can depend on your insurer. While many of your insurers can offer a free look period, the remaining might not provide you with it. A free look period is usually applicable to life insurance products as well as health insurance policies.

When you purchase a ULIP policy, you might receive a free look period of 30 days. After you read through the whole policy document, you should let your insurer know about your go-ahead. If you do not want to opt for the online ULIP policy, you should submit a written document to receive the refund for your returned policy.

When you return your ULIP policy, your insurer might pay your whole premium amount back to you. However, your money can be returned after specific deductions like medical test expenses, applicable tax deductions, and so on. In accordance with the Insurance Regulatory and Development Authority (IRDA) your insurer can make deductions while returning your ULIP policy.

Under a ULIP policy, your refund can depend on the Net Asset Value (NAV). When you purchase a ULIP policy, your total money can be accumulated together to build a corpus. However, your corpus can be divided into small units called ULIP NAVs.

To sum up, a ULIP policy is a long-term investment. Therefore, go through the policy document carefully and consult a financial professional. If you fail to return your ULIP policy after the free look period, you might have to pay the premium for five years (actual look period of a ULIP policy).