What is a "Free Look" Period With an Annuity?

Feel like a dummy for that reckless annuity purchase? The "Free Look" Provision is your Get Out of Annuity Jail Free Card!
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The best thing that the annuity industry has ever done is to implement a free look period that goes with every annuity sale.

Whoever the person was who had this idea initially should get a meritorious service medal. They actually convinced all the annuity carriers to agree to offer it.  There should be a statue of this genius in the Annuity Hall of Fame (if there was one).  I’m serious!  The free look provision is one of the only ways in the industry to try to circumvent the largely unregulated annuity sales practices that dominate the current landscape. It is always best to be proactively educated about annuity purchases, but sometimes the sales pitch gets in the way.

 Let’s take a look at the specific features of the annuity free look provision so you know your options if you bought or decide to buy an annuity.

You can "free look" your annuity from 10 to 30 days depending on the state

It would be easy if all of the states had the same rules and time frames for the free look period, but they don’t.  That would make too much common sense.  Instead, each state has different rules, and the free look period can range from 10 to 30 days.  Because of this lack of uniformity, it’s important to know the rules.  In a perfect world, the agent should inform you of the specific parameters of your state’s free look period during the sales process.  One can dream, I guess.

The "free look" clock starts ticking when the annuity policy is delivered.

The free look period starts when the policy is delivered to you.  Some carriers require you to sign an actual delivery receipt, but it’s important to remember that the clock starts ticking when you get your hands on the actual policy.  The other key fact is that the days counted are calendar days, not work days, so Saturday and Sunday are included.

When the policy is delivered, it is always a good time to give the carrier a call just to verify how the annuity works and to confirm the promises made during the sales process.  Don’t call the agent, call the annuity company.  The company’s toll free number will be on the policy, so if you find out that the guarantees don’t match up with the sales pitch, then you can free look the policy right on that call.

You don't need to state a reason to request a "free look" refund for YOUR annuity policy.

The best part about the free look provision is that you do not have to give a reason for why you want a full refund.  You also don’t have to speak with the selling agent at all.  Instead, you can just call the company who issued the policy and tell them to send your money back.  There might be one form to sign (depending on the carrier), but the customer service people at the carrier will not try to talk you out of it.  As long as you follow the time frame rules, you will get your money back no questions asked.

NOLHGA.com is where you find the annuity "free look" rules governing your state.

The National Organization for Life & Health Guaranty Association is the overseeing body for all of the state departments of insurance.  This site has a link to every state insurance department where you can find your specific state’s free look provision rules.

If you are ever high pressured into signing annuity paperwork, don’t really know what you bought, or simply want your money back, it’s important to know that you can get your money back early on without question. Just use the free look provision.  It’s good news for all potential annuity buyers, and one piece of information you should never forget.

The annuity free look provision is definitely the consumer’s friend.  Think of  it as your get out of an annuity free card. With sales incentives at a fever pitch, and agent sales incentives ruining the annuity industry, it is possible to be up sold into an annuity you don't need. Remember that the free look period is just one last way to make sure your annuity is right for you. If not, you can request your money back during the free look period allowed in your state.