Free Look Period

DEFINITION of 'Free Look Period'

A period where a new insurance policy owner is able to terminate the contract without penalties such as surrender charges. A free look period often lasts for 10 or more days (depending on the insurer), allowing the contract holder to decide whether or not to keep it; if he or she is not satisfied, the contract purchaser can receive a full refund for it.

BREAKING DOWN 'Free Look Period'

During the free look period, the purchaser can continue to ask the insurer questions regarding the contract in order to better understand the policy. If refunded, the amount given back may equate to the value of the account at cancellation or to the amount of purchase payments, depending on the state.

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