Which life insurance policy provision allows a policyowner to cancel the policy and receive a full refund?
Asked by: Solon Kutch | Last update: January 14, 2026Score: 4.6/5 (22 votes)
Which life insurance policy provision allows a policyowner to cancel the policy and receive a full refund within a limited time period after policy delivery?
The Free-look period is the life insurance provision that allows policyholders to return their policy for a full refund if they are dissatisfied within a specified timeframe after purchase.
What type of policy allows the insurance company to cancel a policy?
A cancellation provision clause is a provision in an insurance policy that permits an insurer, or an insurance company, to cancel a property and casualty or a health insurance policy at any time before its expiration date.
What provision provides for a refund when a life insurance policy is surrendered before maturity?
Cash value - The amount of money the life insurance policy owner will receive as a refund if the policy owner cancels the coverage and returns the policy to the company. Also called "cash surrender value."
What is the free look provision?
A free look period, or free look provision, gives you a chance at the beginning of your policy's term to cancel your life insurance for any reason with no penalty. All 50 states and Washington D.C. require free look periods, and the minimum length varies from 10 to 30 days depending on state law.
FREE LOOK PERIOD IN INSURANCE | Have a closer look!
What is the free look provision gives the policyowner?
The free-look provision allows policyowners to return their insurance policy for a full refund within a specified period if they are unsatisfied. This period generally varies by state but typically offers 10 to 30 days for review.
What is free look cancellation policy?
A free look period is a window in which you can cancel your insurance policy without paying for the surrender charges. Moreover, the insurance company refunds your first premium if you return the policy within the period. The free look cancellation period is usually up to 15 days of policy issuance.
What is maturity or surrender benefit?
Policy Maturity Benefits
Policies surrendered closer to maturity yield higher payouts, often up to 90% of total premiums paid in the final two years. This high payout percentage incentivises policyholders to retain their policies longer, potentially aligning with the policy surrender value chart.
Can I cancel my life insurance policy and get my money back?
Unless you're canceling a policy during a free-look period, your premium won't be refunded if you cancel your life insurance policy. There are a few instances where you may see some money returned. For example, you may receive your accumulated cash value if you cancel a permanent policy, minus any taxes and fees.
What is a rear-end loaded provision?
In a life insurance policy with a rear-end loaded provision, surrender charges are deducted when a policyholder decides to surrender or terminate their policy before its maturity or surrender period ends.
What is it called when you cancel a life insurance policy?
Because of this, canceling — or “surrendering” — these policies can involve more than just stopping payments. When you surrender a permanent life insurance policy, you may receive a payout from the cash value, but this is often reduced by surrender charges, especially if you haven't held the policy for many years.
What is the cancellation of the policy?
Step 1: Get in touch with the support department of the insurance company to submit the request for policy cancellation. Step 2: You will need to send a written request, either offline or online, with the details of your policy and the reason for cancellation.
What type of policy allows the insurer to cancel the policy on any specified date and to increase the premiums for any class?
In an optionally renewable policy, the insurer has the option to terminate the policy by class; however, only on a specific date that is stated in the contract. Usually this action will take place on policy anniversary dates or premium due dates. The insurer has the option to increase premiums by class as well.
Is a provision in a whole life policy that allows a policyowner to terminate the policy in return for a?
Final answer: A Reduced Paid-Up Insurance option in a whole life policy allows the policyholder to discontinue the policy in return for a reduced paid-up policy of the same kind. This means no additional premium payments are necessary, but the death benefit will be reduced.
Which of the following provisions allows an insurer to terminate the policy?
The cancelable provision is the correct answer, as it permits either the insured or the insurer to terminate the policy at any time. Other provisions like optionally renewable, conditionally renewable, and guaranteed renewable have specific conditions and limitations regarding cancellation.
What is the optionally renewable provision allows?
An optionally renewable provision allows the insurance company the option to renew or cancel a policy on the policy anniversary date. The policy anniversary date is the anniversary of the policy's effective date and is often used as the policy renewal date.
Can you cancel a life policy?
In order to cancel your life insurance policy, you will need to call your life insurance company. Because life policy cancellations differ from provider to provider, they will be able to provide you with their specific cancellation process. Remember to ask your provider when your cover will end.
How do I cancel my AIA policy?
Free Look Period - You may cancel the policy by giving a written request that is signed by you to AIA Bhd within fifteen (15) days of your e-policy contract being made available on AIA's customer portal. The premiums that you have paid will be refunded.
Can you cancel an insurance policy?
Policyholders can cancel their auto insurance policy at any time, for any reason. And you never have to wait until the end of your policy period to cancel your policy. Even if your policy only started a few days ago, you may cancel it.
What is surrender benefit?
A surrender value in insurance refers to the amount paid by the insurance company to the policyholder upon terminating the policy before its maturity date. If the policyholder surrenders during the policy tenure, the earnings and savings portion will be paid to him or her.
What is maturity benefit policy?
The maturity benefit is a lump-sum payment made by the insurance provider when the policy has reached its expiration date. It simply implies that if your insurance policy has a 15-year term, you, the insured, will get a payout at the end of those 15 years.
What is the right to surrender?
What Are Surrender Rights? Surrender rights refer to the ability to cancel an annuity or life insurance policy in exchange for its cash value. You end the contract and no longer owe future premium payments. Surrendering a contract early may result in additional fees plus income tax liabilities.
Is free cancellation a full refund?
Choose the Free cancellation option as "Yes" and pay a nominal fee per passenger. Get full refund on opting free cancellation while cancelling ticket anytime 4 hours before scheduled departure/chart preparation.
What is the free look provision in life insurance?
The free look period is the required time period in which a new life insurance policy owner can terminate the policy without any penalties, such as surrender charges. A free look period often lasts 10 or more days depending on the insurer and state law.
What is the cancellation policy?
A cancellation policy is a written agreement between a service provider and their client that clearly defines consequences, typically a fee, if the client cancels the appointment. The fee is either a percentage of the total cost of service or a fixed amount.