You could soon cancel your insurance policies within a year
What's the story
In a major move, Finance Minister Nirmala Sitharaman has proposed a change to the free look period for insurance policies.
The government is considering extending the period from the existing one month to a year.
This proposal, if implemented, will offer policyholders more time to review their policies in detail and claim a full refund of their premium if the policy doesn't meet their expectations.
Policy protection
Free look period: A safeguard for policyholders
The free look period acts as a protection mechanism for policyholders who feel their insurance policy was misrepresented.
To cancel a policy during this period, policyholders must submit a written request with specific details.
On receiving the cancelation request, the insurance firm may engage with the policyholder to understand their reasons and explore potential solutions.
Legislative changes
Insurance Amendment Bill and FDI in insurance sector
Sitharaman also revealed internal consultations on Insurance Amendment Bill have been concluded. However, before this bill is introduced, the law will have to be amended.
Apart from these legislative changes, the Centre is looking at more FDI opportunities for the insurance sector.
"We need more players in insurance. We need to deepen the market," Sitharaman said while announcing these proposed changes.