Skip to content

NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Life Insurance Products

In a life insurance policy, the 'free look period' allows the policyholder to do which of the following after receiving the policy document?

The free look period lets a policyholder review the policy terms after receiving the document and cancel it if unsatisfied. The insurer refunds the premium after deducting permitted charges such as proportionate risk cost, stamp duty and medical expenses.

  1. AReview the terms and return the policy if not agreeable, with a refund of premium after permitted deductionsCorrect
  2. BChange the life assured to another person without any underwriting
  3. CConvert the policy into a mutual fund investment without charges
  4. DExtend the premium payment term without any extra premium

Explanation

The free look period lets the policyholder examine the terms and return the policy within the specified period if disagreeable. The insurer refunds the premium after deducting proportionate risk premium, stamp duty and medical costs. It does not allow changing the life assured or converting the product.

Did you get it right without looking?

One question tells you little. A timed set on Life Insurance Products shows your real accuracy, how long you take and where you lose marks.

Practise Life Insurance ProductsFree diagnostic mock

More Life Insurance Products questions