Free-look period on insurance, HMO

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The Insurance Commission (IC) on Monday called for the implementation of a free-look period for all health insurance policies.

This was learned from Insurance Commissioner Dennis Funa who instructed all insurers to provide a 15- and five-day free-look period for policies with a duration of more than six months and less than six months, respectively.

“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,” Funa said.

A free-look period protects the customer if he/she feels that the policy is not what he/she signed up for and protects the insuring public from the dangers of misselling.

According to the IC, the free-look period will provide consumers the time to decide whether or not to continue with the contract or terminate the policy should the client desire.

The agency also said the free-look period begins once the policyholder receives the contract and will be entitled to a refund upon cancelation.

The IC chief said this period will benefit insurance customers as it can be used to review the contract or policy to make sure it meets the needs of the insured.

“It (free-look) is that window of time given to policyholders to read the policy provisions, understand the inclusions and exclusions and if he/she has purchased the right product,” Funa said.

“A free-look period protects the customer if he/she feels that the policy is not what he/she signed up for and protects the insuring public from the dangers of misselling,” he added.

Funa likewise ordered health maintenance organizations (HMO) to incorporate a similar free-look period in all its health maintenance contracts.

There were no free-look provisions for both insurance and HMO consumers in the Philippines prior to this one, Funa said.

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