The Centre has asked the private insurance companies to extend the lookout (free-look) period for policyholders from 30 days to one year, Financial Services Secretary M Nagaraju said on February 17 while replying to a question during a press conference in Mumbai.
The free-look period gives a policyholder time to return or cancel the policy without paying surrender charges. The period also allows a customer to review the policy’s terms and conditions and the policyholder can return if it’s not acceptable to them.
Nagaraju said, “ We encourage our insurer companies to extend this look-out policy to one month to one year. The insurer will refund the first premium if paid by the policyholder within the stipulated period.”
The secretary further said that the public sector companies have been asked to ‘call back’ insurance policies. The company has to call the policyholder back and inquire whether he is satisfied with the policy or if the policyholder wants to return it. He said the Centre has directed private companies also to follow the same to curb ‘is-selling’.
The insurance sector has been opened up with necessary safeguards, ensuring broader participation while maintaining financial security. Union Budget 2025 increased the sectoral cap of the insurance sector to 100% from 74%.
