Udaipur, February 18, 2025 - To protect people from insurance mis-selling, the government has instructed private companies to extend the free-look period for policyholders from one month to one year. The Free Look period is the time during which a customer can cancel the insurance policy without paying a surrender fee.

So, if you are not satisfied with your insurance policy after purchasing it, you will soon be able to return it within one year, and the premium amount paid to the insurance company will be refunded.

During a post-Budget Press conference in Mumbai yesterday, February 17, M Nagraju, Secretary of the Department of Financial Services, said that if a policyholder returns the policy within this period, the company will have to refund the first premium amount deposited.

Nagraju also urged public sector insurance companies, along with private insurance companies, to implement the "callback" facility in their policies. Under this, once the product is sold, the customer is given a "callback." If the customer is dissatisfied with the product or wants to return the policy for any other reason, they can do so.

Last year, the insurance regulator IRDA extended the Free Look period from 15 days to 30 days.

According to an IRDA report, there were 23,335 cases of insurance mis-selling in 2023-24. In many cases, relationship managers at banks misled customers by presenting insurance policies as high-return Fixed Deposits. In some cases, customers were made to buy term, property and other insurance policies as a pre-condition for loan approval, claims the report.

Source: Media Reports