Gov’t regulator gives policyholders time to study health plans before buying

Insurance Commission

MANILA, Philippines – The Insurance Commission (IC) has ordered all insurers in the country to give customers five to 15 days as “free-look period” for health insurance products.

In a statement on Monday, Insurance Commissioner Dennis B. Funa said insurance companies must allow a five-day free-look period for health insurance policies covering six months or less, while a longer 15 days must be given to coverage of over half a year.

The Insurance Commission defined the free-look period as “time in which a new health insurance policy owner can terminate or cancel the insurance policy.”

“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 reason/s, the policyholder can demand the cancellation thereof… It is that window of time given to policyholders to read the policy provisions, understand the inclusions and exclusions, and if he or she has purchased the right product,” Funa explained.

Also, Funa said “a free-look period protects a customer if he/she feels that the policy document is not what he/she signed up for and protects the insuring public from dangers of mis-selling.”

As such, “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,” according to Funa.

The free-look period starts as soon as the policyholder receives the health insurance contract.

“If an insured 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,” Funa said.

As for health maintenance organizations (HMOs), Funa also ordered them to “incorporate a similar free-look period in all health maintenance contracts.” /kga