Free Look Period

A free-look period is a period of time after an individual has signed up for an insurance policy where the contract can be cancelled by the client without penalty.

Insurance policies in Singapore have a standard 14-day free look period. And in the case of integrated shield plans, 21 days.

Clients can use this period of time to review the terms and conditions more meticulously, and reverse their buying decisions without being under any sales pressure.

The free-look-period commences from the date the policy is received by the policy holder, no the date that the application documents were signed.

It is also not the date that the policy is dated, nor the date the policy was sent for delivery. It might even be argued that the commencement date does not necessarily mean the delivery date of a policy.

When a policy is posted via snail mail or email, the commencement date of the 14-day free look period would be 7 days after the sending date.

This is a reason why many agents prefer to present insurance policies to the insured in person so that they can be sure that it was delivered and received by the client.

Mandatory disclosure required?

People who have just signed up for policies, and those who are intending to, should be mindful that insurance agents might feel that they are under no legal obligation to inform clients of the presence of this free look period.

This is understandable as agents would not want to put their sales in jeopardy by explicitly telling them that there is a back door to get out of the transaction.

This means that it is possible for agents not to voluntarily reveal the presence of such clauses and teach clients how to trigger them.

You agent could very well go through all the details of how a medical plan would benefit you, draw your attention to the huge coverage and claim limits, describe how to make claims, and how to make payment of premiums, but conveniently leave out a critical piece of information… which is that you can withdraw from an agreement within a free-look period without incurring any financial consequences.

That can be a tough pill for some people to swallow.

The notion is that people are not stupid and would like to know these material information when making financial decisions. Even with the presence of this get-out clause, people who activate them are few and far between.

But leaving this detail out of all discussions can put a question mark over whether an agent can be trusted.

However, agents cannot deny the availability of this clause when questioned about it as it would constitute to a breach of their ethics and code of conduct.

Just know that the free-look period is an entitlement consumers enjoy so that they can change their minds about a particular policy after learning more about them through research and friends.

To cancel the policy, a written notice of cancellation has to be sent to the insurance company.

Refunds are usually issued via cheque. The refund amount would be the premium without interest, and less any expenses incurred.

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