California Life-Only & Accident and Health AgentAccident and Health InsuranceEasy
A health insurance policy contains a provision that specifies the period of time, usually 10 days, during which the policyowner can review the policy and return it for a full refund if not satisfied. What is this provision called?
- AReinstatement Provision
- BIncontestability Clause
- CFree-Look Provision
- DGrace Period
Show answer & explanationAnswer & explanation
Correct answer: C. Free-Look Provision
The Free-Look Provision (or 10-day right to examine) gives the policyowner a specified period, typically 10 days, after receiving the policy to review its terms and conditions. If they are not satisfied, they can return the policy for a full refund of premiums paid, without penalty.
Why the other options are wrong
- A. Reinstatement Provision outlines the conditions under which a lapsed policy can be restored to active status.
- B. Incontestability Clause prevents the insurer from denying a claim due to misstatements on the application after a certain period (usually 2 years).
- D. Grace Period is the time allowed to pay a premium after its due date without the policy lapsing.
Free-Look Provision
A standard health insurance policy provision that grants the policyowner a specific period (e.g., 10 days) after policy delivery to review the policy. If dissatisfied, the policy can be returned for a full refund of premiums.
- Typically 10 days (can be longer for seniors).
- Starts from policy delivery.
- Allows full refund if returned within period.
- No questions asked return.
Memory trick: FREE-LOOK: You are FREE to LOOK and return it.