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Tuesday, January 20, 2015

Insurance Free Look period

The 15-day free-look period in insurance is a customer-friendly feature.


Here are what you should know about it

 

1 Give correct contact details on form

When you buy an insurance policy, fill in the contact details yourself in the application form. Often, agents give their phone numbers. This means the mandatory welcome call from the insurer could be answered by them instead of you, the policyholder. During the welcome call, the features of the policy are explained in detail, to avoid any miscommunication. At that time, if the agent has misled you with false promises, you can immediately call for termination of the policy.

2 Save the date of delivery

The 15-day free-look period begins the day you receive the policy. Make sure you retain the envelope containing the policy documents as it will have the date of delivery. Also, before you sign on the receipt, check the date. You need to be cautious that you do not sign on a back-dated receipt as it will cut into your 15-day trial period and you may miss the cancellation deadline.

3 Cancel policy through insurer

If you decide to cancel your policy, do not go by oral intimation to the agent. The agent could try to delay the process. There have been instances where agents have withheld documents so that the free-look period expires. Call up the insurer's customer care to communicate your decision to cancel the policy.You should visit the insurer's office to submit your policy cancellation application. Many insurers put up cancellation forms on their websites, which can be downloaded. Make sure you get a time-stamped receipt acknowledging your application.

4 Do not expect full refund of premium

The entire premium paid is not refunded in case of cancellation. Even if you return the policy within the free look period, the insurer will refund the amount paid after deducting expenses incurred on medical tests and stamp duty. If the risk cover has already come into effect, the proportionate risk premium for the period will be deducted before cancelling the policy.

5 Understand refund process for ULIPs

In case of unit-linked insurance policies, the units allotted will be repurchased by the insurer at the net asset value on the day your policy gets cancelled. For example, if your premium was `100, and the insurer deducted `20 as charges and invested `80 in the fund option, assuming the NAV of your units has grown to `85 during this period, the insurer will have to refund `85 plus `20, but after deducting stamp duty, medical and mortality charges for the period from `105.

Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015

1.ICICI Prudential Tax Plan

2.Reliance Tax Saver (ELSS) Fund

3.HDFC TaxSaver

4.DSP BlackRock Tax Saver Fund

5.Religare Tax Plan

6.Franklin India TaxShield

7.Canara Robeco Equity Tax Saver

8.IDFC Tax Advantage (ELSS) Fund

9.Axis Tax Saver Fund

10.BNP Paribas Long Term Equity Fund

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