The Insurance Commission (IC) has issued two circular letters instructing local insurance companies and health maintenance organizations (HMOs) to give ample time for clients to decide on the policy.
Under IC Circular Letters 2018-65 and 2018-66, local insurance companies and HMOs are instructed by the commission to provide a 15-day free-look period for health insurance policies and health maintenance contracts with a duration of more than six months, as well as a five-day free-look period if the duration is six months or less.
“A free-look period protects a customer if he or she feels that the policy document is not what the person signed up for and protects the insuring public from dangers of misselling,” Insurance Commissioner Dennis B. Funa said.
According to the IC, a free-look period refers to the period of time in which a new health insurance policy owner can terminate or cancel the insurance contract, which is for the benefit of a policyholder since it allows for the review of the policy to make sure it meets the needs of the insured.
Funa pointed out that a free-look period allows the policyholder to decide whether or not to continue with the contract, and if he or she decides to cancel it for whatever reasons, the policyholder can demand the cancellation thereof.
“If the insured for any reason does not want to accept the coverage or cancel the policy, he or she may demand for the cancellation or termination of the contracts,” he added.
Furthermore, the IC said that the free-look period begins once a policyholder receives the new health insurance policy or contract.
If the policyholder decides to cancel or surrender the policy within the free-look period, he or she shall be entitled to the return of all premiums paid.
“For group contracts, the free-look period is not mandatory; however, the parties to such group contract may agree on the inclusion of the free-look provision. It is understood that the group contract holders who negotiated and accepted the group contracts in behalf of its members or employees have full knowledge and understanding of its contents,” the circular letter read.