Indiana State Life and Health Insurance Practice Exam

If a new life insurance policy is replacing an existing one, the insured is given the right to return for a full refund of at least ____ days after policy delivery?

1. 10

2. 20

3. 30

4. 40

The correct answer is: 20

When a new life insurance policy is issued to replace an existing one, the insured is granted a specific period known as the "free look" period. During this time, the insured can review the new policy and decide whether to keep it or return it for a full refund. In Indiana, this period must be at least 20 days from the date of policy delivery. This practice is important as it protects consumers by allowing them the chance to fully understand the terms of the new policy and to review it in relation to their existing insurance coverage. If they find the new policy does not meet their needs or if they have second thoughts about their decision, they can return it and receive a complete refund without penalty. This regulatory requirement helps to foster consumer trust and ensures that policyholders make informed decisions.