What is a free look period?
A free look period is a window after a policy is delivered — commonly 10 to 30 days, set by state law — during which the client can cancel for a full refund of premium. Cancellation during free look means the policy is treated as never having been in force, and commission is returned in full.
Free look cancellations are a different animal from lapses. They usually mean the sale itself did not hold: the client had second thoughts, someone talked them out of it, or the policy that arrived did not match what they understood they were buying.
That last cause is worth watching. A cluster of free look cancellations on one producer is a sales-process signal, not bad luck, and it is visible long before persistency data would show it.
| Free look cancellation | full premium refunded, full commission returned |
|---|---|
| Policy treated as | never in force |
| Month-three lapse | premium kept, unearned commission reclaimed |
| What each tells you | sales problem vs payment problem |
Free look lengths are set by state law and vary.