Maryland Life and Health Insurance License Practice Exam

What is the maximum duration for a typical free-look period offered in policies?

1. 5 days

2. 10 days

3. 20 days

4. 30 days

The correct answer is: 10 days

The duration of a free-look period is a consumer protection feature that allows policyholders to review their insurance policies after purchase and cancel them for a full refund if they are not satisfied. In Maryland, the standard maximum duration for a typical free-look period is 10 days. This period is intended to give consumers sufficient time to evaluate the details of the policy, including the terms, conditions, and overall suitability for their needs. If a policyholder decides to cancel the policy during this 10-day period, they can do so without any penalty, and they will receive a full refund of any premiums paid. This practice ensures that consumers feel more secure in their decision-making process regarding life and health insurance products. Options such as 5 days, 20 days, and 30 days do not reflect the standard practice; while shorter or longer periods may exist for specific types of policies or in different states, the typical free-look period in Maryland is well-established at 10 days, making it the correct choice in this context.