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Health insurance buyers given 15-day period to read fine print

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Insurance Commission (IC)

THE Insurance Commission (IC) is requiring all insurers to give a “free-look” period for health insurance policies to allow clients to decide whether to proceed with the contract.

In a statement sent to reporters on Monday, the IC said Insurance Commissioner Dennis B. Funa has instructed all insurers to give a 15-day free-look period for health insurance policies with a duration of more than six months.

On the other hand, policies with a duration of six months or less are required to have a five-day free-look period.

A free-look period is the amount of time given to a policyholder to decide whether to continue with the contract or not. This gives the policyholders some time to review the policy if it meets their needs.

“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,” Mr. Funa said.

Once a policyholder receives the new health insurance policy, the free-look period begins. If the client decides to discontinue the policy, the customer can get back all premiums paid.




“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 misselling,” Mr. Funa added.

Asked for comment, the Philippine Life Insurance Association, Inc. (PLIA) welcomed the IC regulation, saying it will safeguard the interests of customers.

“The free look period is a good consumer protection mechanism that provides an opportunity to validate the terms and features of the product as presented during the sales process,” PLIA General Manager George C. Mina told BusinessWorld in a text message.

He added that the grace period will allow the policyholder to get to know the fine print, and avail of the remedy should the client disagree with the contract’s terms or provisions.

“It is a welcome safeguard to protect the interest of the customer especially for medical products that involve inherent limitations on pre-existing conditions.”

Likewise, health maintenance organizations are also directed to incorporate a similar free-look period in all health maintenance contracts. — Karl Angelo N. Vidal