What is an Annuity Free Look Period?
An annuity free look period is a "money back guarantee" grace period in which the annuity purchaser may cancel the annuity contract and receive a full refund of their purchase premium with no surrender fees or panalties.
How Does the Free Look Period work in an Annuity?
The annuity-free look is a period of time in which you can decide to keep your annuity or return or cancel it and receive a full refund of your premium. The free look period for an annuity varies from state to state and can range anywhere from 10 to 30 days.
The legal term for “free look period” is RIGHT TO CANCEL, and that is usually the language used on the actual annuity contract.
The free-look period is designed to provide you an opportunity to thoroughly review your contracts documents and the time necessary to ask any questions you may have. If you are not 100% confident in your decision you may want to seek advice from a legal or financial professional.
When does the free look period begin?
The free look provision begins ton the day you physically receive your contract which is notated by the date you signed your delivery receipt. Just behind the free look period you’ll see your Delivery Reciept – which you’ll need to sign and date the day you physically receive your annuity contract.
Not only are life insurance companies required to provide a free look provision, but they are also mandated to list it on the very front page of the contract.
Picture of an Annuity Contract's Free Look Provision Page
Picture of an Annuity Contract Delivery Receipt
Annuity Free Look Periods by State
| State | Free Look Period Requirements |
|---|---|
| Alabama | 15 days in some circumstances; 30 days for replacement contracts |
| Alaska | 10 days for new policies; 30 days if you need a replacement contract |
| Arizona | 10 days standard; 30 days if you're 65 years old or older |
| Arkansas | 10 days in some circumstances |
| California | 10 days standard; 30 days if you're 62 or older |
| Colorado | None required by law |
| Connecticut | 10 days |
| Delaware | 10 to 15 days |
| Florida | 14 days standard; 21 days if you're 60 or older |
| Georgia | 10 days |
| Hawaii | 10 days standard; 15 days in some circumstances |
| Idaho | 20 days |
| Illinois | 10 days |
| Indiana | 10 days |
| Iowa | 10 days standard; 15 days in some circumstances |
| Kansas | 10 days |
| Kentucky | 10 days standard; 30 days if you need a replacement contract |
| Louisiana | 10 days |
| Maine | 15 days in some circumstances |
| Maryland | 10 days |
| Massachusetts | 20 days |
| Michigan | 10 days minimum |
| Minnesota | 10 days with a new policy; 30 days if you need a replacement policy |
| Mississippi | None required by law |
| Missouri | 10 days |
| Montana | 15 days in some circumstances |
| Nebraska | 10 days |
| Nevada | 10 days with a new policy; 30 days if you need a replacement policy |
| New Hampshire | 10 days |
| New Jersey | 10 days |
| New Mexico | 15 days in some circumstances |
| New York | 10 to 30 days |
| North Carolina | 10 days standard; 15 days in some circumstances |
| North Dakota | 20 days |
| Ohio | 10 days standard; 15 days in some circustances; 30 days if you need a replacement policy |
| Oklahoma | 20 days |
| Oregon | 30 days for replacement policies |
| Pennsylvania | 10 days |
| Rhode Island | 20 days |
| South Carolina | 10 days standard; 20 days if you need a replacement; 30 days if you're solicited and accept the policy |
| South Dakota | 10 days |
| Tennessee | 10 days |
| Texas | 20 days standard; 30 days if you need a replacement contract |
| Utah | 10 days standard; 30 days if you need a replacement contract |
| Vermont | None required by law, but 10 days is standard |
| Virginia | 10 days if you need a replacement contract; no requirement by law for new contracts |
| Washington | 10 days with a requirement to issue a refund within 30 days |
| West Virginia | 10 days minimum |
| Wisconsin | 30 days if you need a replacement contract; no requirement by law for new contract |
| Wyoming | 30 days if you need a replacement contract; no requirement by law for new contract |
Source: Annuity.org
How long is the typical free look period?
The annnuity free look period is a minimum of 10 days but can be as long as 30 days; depending on your state of residence and the insurance company issuing your contract. This is because annuities and life insurance contracts are regulated at the state level; unlike securities and bank deposits which are Federally Regulated.
What happens if I change my mind after the free look period?
If you decide to cancel your contract after the annuity free look period, any early withdrawals will be subject to any fees or penalties specified by your contract.
