PSI Ohio Insurance Practice Exam

In what scenario can the policyowner exercise a free look period?

1. Before the policy is paid for

2. Upon application submission

3. After receiving the policy

4. At the time of claim

The correct answer is: After receiving the policy

The free look period is a provision that allows the policyowner to review their insurance policy after purchase and cancel it for a full refund if they are not satisfied. This period typically begins once the policy is received by the policyowner. During this time, the policyholder can evaluate the terms, coverage, and benefits outlined in the policy and decide if it meets their expectations and needs. The correct choice reflects this process perfectly. The free look period emphasizes the importance of ensuring that individuals are completely comfortable and informed about their insurance policy before they become fully committed. If the policyowner decides within this designated timeframe that the policy is not suitable for them, they have the right to cancel it and receive a full refund of the paid premiums. Environments for utilizing the free look period properly align with consumer protection principles. Other scenarios listed, such as before the policy is paid or upon application submission, do not align with the purpose of the free look period since it requires the policy to be delivered and accepted by the policyholder to take effect. Likewise, the option concerning a claim does not relate to the policy review process, as the free look period is specifically tied to the evaluation of the policy rather than its application in the event of a claim.