The correct answer is D. Free look period.
A free look period is a period of time, typically 10 to 30 days, during which a policyholder can cancel a life insurance policy for a full refund of the premium paid. This period allows the policyholder to review the policy and make sure it is the right fit for them before they are locked into a long-term contract.
Surrender is the act of terminating a life insurance policy before the death of the insured. When a policy is surrendered, the insurer will typically refund a portion of the premium paid, but there may be a surrender charge. The surrender charge is a fee that the insurer charges to discourage policyholders from surrendering their policies early.
A loan is a sum of money that is borrowed from an insurer and must be repaid with interest. Loans can be used to cover expenses such as medical bills, home repairs, or education costs.
Assignment is the transfer of ownership of a life insurance policy to another person. The assignment can be made to a spouse, child, or other beneficiary. The assignee becomes the new owner of the policy and is responsible for paying the premiums.
In conclusion, the free look period is the only option that gives the policyholder the opportunity to cancel the policy without penalty. The other options all involve some type of financial obligation on the part of the policyholder.