What is a 'Free Look Period'

A free look period is 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.

RELATED TERMS
  1. Surrender Fee

    A charge levied against an investor for the early withdrawal ...
  2. Surrender Charge

    A fee levied on a life insurance policyholder upon cancellation ...
  3. Traditional Whole Life Policy

    A type of life insurance contract that provides for insurance ...
  4. Participating Policy

    An insurance contract that pays dividends to the policy holder. ...
  5. Values

    The worth of a nonforfeiture clause that specifies that an insured ...
  6. Full Charge

    The event in which the price of a futures contract covers all ...
Related Articles
  1. Insurance

    Understanding Cash Surrender Value

    The amount of money an insurance company pays the owner of an insurance policy if the policy is voluntarily surrendered prior to the event that is insured
  2. Financial Advisor

    Cash Value vs. Surrender Value: What Is the Difference?

    How much you actually receive from the cash value of your life insurance policy is based on the surrender value, which can sometimes be much lower.
  3. Insurance

    Exploring Advanced Insurance Contract Fundamentals

    Understanding your contract can help you protect our family's financial security.
  4. Financial Advisor

    Divorce and Annuities: What Clients Need to Know

    Divorce can be the most financially devastating event in a person’s life. Here’s what your clients need to know about handling annuities in a divorce case.
  5. Taxes

    7 Reasons Why You Haven’t Received Your Tax Refund

    The reasons for a delay in getting your tax refund range from incorrect information on your forms to a debt offset. Here are five more, plus remedies.
  6. Taxes

    5 Ways To Receive Your Tax Refund

    Taxpayers in the U.S. can receive their income tax refund in many different forms - checks, debit cards, savings bonds and direct deposits. Find out which one is right for you.
  7. Taxes

    The Tax Refund: When It Hurts Your Retirement

    A refund can represent a lost opportunity cost for things you could have done in the past.
  8. Insurance

    Life Insurance: How To Get the Most Out Of Your Policy

    There are many benefits to owning a life insurance policy - if you get the right one for you.
  9. Financial Advisor

    Advising FAs: Explaining Life Insurance to a Client

    Life insurance was initially designed to protect the income of families, particularly young families in the wealth accumulation phase, in the event of the head of household's death.
  10. Insurance

    What Happens If Your Insurance Company Goes Bankrupt?

    When insurance companies go bankrupt or face financial difficulty, it's bad news for policy holders.
Hot Definitions
  1. Salvage Value

    The estimated value that an asset will realize upon its sale at the end of its useful life. The value is used in accounting ...
  2. Cryptocurrency

    A digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of ...
  3. Promissory Note

    A financial instrument that contains a written promise by one party to pay another party a definite sum of money either on ...
  4. SEC Form 13F

    A filing with the Securities and Exchange Commission (SEC), also known as the Information Required of Institutional Investment ...
  5. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  6. Absolute Advantage

    The ability of a country, individual, company or region to produce a good or service at a lower cost per unit than the cost ...
Trading Center