New York Insurance Exam Practice Question
What is the purpose of a free-look period in an insurance policy?
Correct Answer: B
Rationale: The free-look period in an insurance policy serves to allow the policyholder to review and return the policy without penalty. This period ensures that individuals can fully understand their coverage and make informed decisions.
Option A is incorrect as the insurer does not cancel the policy during this time; it is the policyholder who has the right to return it. Option C is misleading; the free-look period does not waive the first premium payment but rather provides a chance to reconsider the purchase. Option D misinterprets the purpose; the grace period relates to premium payments, whereas the free-look period focuses on policy acceptance.
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