[amp_mcq option1=”The insurance company will refund 100% of the premium” option2=”The insurance company will refund 50% of the premium” option3=”The insurance company will refund the premium after adjusting for proportionate risk premium for the period on cover, medical examination expenses and stamp duty charges” option4=”The insurance company will forfeit the entire premium” correct=”option1″]
The correct answer is: A. The insurance company will refund 100% of the premium.
A free look period is a period of time, usually 14 days, during which a policyholder can cancel their policy and receive a full refund of the premium. This is a legal requirement in most countries, and it is designed to give policyholders peace of mind that they can cancel their policy if they are not happy with it.
During the free look period, the policyholder is not covered by the policy. This means that if they die or suffer a serious illness during this time, they will not receive any benefits from the policy. However, they will still be able to cancel the policy and receive a full refund of the premium.
The free look period is a valuable opportunity for policyholders to review their policy and make sure that it is right for them. If they are not happy with the policy, they can cancel it and receive a full refund. This can be a great way to avoid any financial losses if you decide that you do not want to keep your policy.
Here is a brief explanation of each option:
- Option A: The insurance company will refund 100% of the premium. This is the correct answer. During the free look period, the policyholder is not covered by the policy, but they can still cancel the policy and receive a full refund of the premium.
- Option B: The insurance company will refund 50% of the premium. This is not correct. The policyholder is entitled to a full refund of the premium during the free look period.
- Option C: The insurance company will refund the premium after adjusting for proportionate risk premium for the period on cover, medical examination expenses and stamp duty charges. This is not correct. The policyholder is entitled to a full refund of the premium during the free look period.
- Option D: The insurance company will forfeit the entire premium. This is not correct. The policyholder is entitled to a full refund of the premium during the free look period.