California Life-Only & Accident and Health AgentLife InsuranceEasy
A life insurance agent is explaining various policy features to a client. The client asks about a provision that allows them to review the policy after delivery and return it for a full refund if they are not satisfied. Which policy provision is the agent describing?
- AIncontestability Clause
- BReinstatement Provision
- CGrace Period
- DFree Look Period
Show answer & explanationAnswer & explanation
Correct answer: D. Free Look Period
The Free Look Period (also known as the Right to Examine) is a mandatory provision in life insurance policies that allows the policyowner a specified number of days (e.g., 10 or 30) after policy delivery to review the policy and return it for a full refund of premiums paid if not satisfied.
Why the other options are wrong
- A. The Incontestability Clause prevents the insurer from denying a claim due to misstatements after a certain period (e.g., 2 years).
- B. A Reinstatement Provision allows a lapsed policy to be put back in force under certain conditions.
- C. A Grace Period allows a policyowner extra time to pay a premium before the policy lapses.
Free Look Period
A mandatory provision in life insurance policies that gives the policyowner the right to review the policy after delivery and return it for a full refund of premiums within a specified number of days.
- Mandatory provision, typically 10-30 days.
- Starts from the date of policy delivery to the owner.
- If returned, all premiums paid are refunded.
Memory trick: Grace, Incontestability, Free Look, Reinstatement: Policy's protective parts.