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The Annuity Free Look Period Explained

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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 free look period page from an annuity contract.
Free Look Period Page from an Annuity Contract Issued by Sagicor Life in Ohio.

Picture of an Annuity Contract Delivery Receipt

A delivery receipt page from an annuity contract with text stating the free look period begins date of delivery receipt.
Delivery Receipt Page from an Annuity Contract Issued by Sagicor Life in Ohio.

Annuity Free Look Periods by State

StateFree Look Period Requirements
Alabama15 days in some circumstances; 30 days for replacement contracts
Alaska10 days for new policies; 30 days if you need a replacement contract
Arizona10 days standard; 30 days if you're 65 years old or older
Arkansas10 days in some circumstances
California10 days standard; 30 days if you're 62 or older
ColoradoNone required by law
Connecticut 10 days
Delaware10 to 15 days
Florida14 days standard; 21 days if you're 60 or older
Georgia10 days
Hawaii 10 days standard; 15 days in some circumstances
Idaho20 days
Illinois10 days 
Indiana10 days
Iowa 10 days standard; 15 days in some circumstances
Kansas10 days
Kentucky10 days standard; 30 days if you need a replacement contract
Louisiana10 days
Maine15 days in some circumstances
Maryland10 days
Massachusetts20 days
Michigan10 days minimum
Minnesota10 days with a new policy; 30 days if you need a replacement policy
MississippiNone required by law
Missouri10 days
Montana15 days in some circumstances
Nebraska10 days
Nevada10 days with a new policy; 30 days if you need a replacement policy
New Hampshire10 days
New Jersey10 days
New Mexico15 days in some circumstances
New York10 to 30 days
North Carolina10 days standard; 15 days in some circumstances
North Dakota20 days
Ohio 10 days standard; 15 days in some circustances; 30 days if you need a replacement policy
Oklahoma20 days
Oregon30 days for replacement policies
Pennsylvania10 days
Rhode Island20 days
South Carolina10 days standard; 20 days if you need a replacement; 30 days if you're solicited and accept the policy
South Dakota10 days
Tennessee10 days
Texas 20 days standard; 30 days if you need a replacement contract
Utah10 days standard; 30 days if you need a replacement contract
Vermont None required by law, but 10 days is standard
Virginia10 days if you need a replacement contract; no requirement by law for new contracts
Washington10 days with a requirement to issue a refund within 30 days
West Virginia10 days minimum
Wisconsin30 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.

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