The free look period gives annuity purchasers at least 10 days to reconsider their decision and cancel an annuity contract without penalty. The free look period varies from state to state and is designed to give consumers time to thoroughly review their annuity contracts and determine whether the complex financial product suits their needs.
Jennifer Schell is a professional writer focused on demystifying annuities and other financial topics including banking, financial advising and insurance. She is proud to be a member of the National Association for Fixed Annuities (NAFA) as well as the National Association of Insurance and Financial Advisors (NAIFA).
Savannah Pittle is an accomplished writer, editor and content marketer. She joined Annuity.org as a financial editor in 2021 and uses her passion for educating readers on complex topics to guide visitors toward the path of financial literacy.
Certified Financial Planner Rubina K. Hossain is chair of the CFP Board's Council of Examinations and past president of the Financial Planning Association. She specializes in preparing and presenting sound holistic financial plans to ensure her clients achieve their goals.
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Key Takeaways
The free look period is an opportunity to carefully consider your new contract and how it aligns with your needs.
Free look periods vary by the annuity provider. Most states require a minimum length for the free look period, usually between 10 and 30 days.
It may be wise to consult your financial advisor during this time.
What Is the Free Look Period?
States regulate annuities, and most states require a free look period. During this time, which should be clearly indicated in the contract, the buyer can cancel the contract and receive a full refund of their premium without paying fees or surrender charges.
While most states require a minimum of 10 to 30 days for free look provisions, insurance companies may provide longer free look periods than are required by law.
Pro Tip
The free look period is sometimes referred to as a grace period. However, the term grace period usually relates to the amount of time you have to make payments past their due date.
Protections for Annuity Holders
The free look period is designed to help consumers make decisions without being pressured or badgered. It gives people a chance to further review their financial decision and ensure it’s the best option for them.
During the free look period, you can still research your annuity and see if others have a better deal. You can make sure you understand how your annuity works. You can read your contract and ask questions.
You may even seek the advice of a lawyer, financial advisor or trusted family member to review the policy for you. As Tim Melia, Certified Financial PlannerTM professional at Embolden Financial Planning, told Annuity.org, “A wise use of the free-look period may include seeking professional advice on the contract. Have someone familiar with annuities review it — an acquaintance or a paid advisor — and consider their opinion.”
Melia also recommended giving thought to annuity alternatives. “Consider if there are better or less expensive alternatives; can the same annuity benefit be replicated with other investment opportunities that are more liquid or less expensive?” Melia asked. “Consider if an annuity is actually the right investment in the context of your overall financial goals.”
If you decide you don’t want the annuity after all, you can cancel your contract without having to explain why as long as you’re still within the specified free look period. Just remember, the clock starts ticking when your annuity contract is delivered to you.
A wise use of the free-look period may include seeking professional advice on the contract. Have someone familiar with annuities review it — an acquaintance or a paid advisor — and consider their opinion.
— Tim Melia, Certified Financial PlannerTM professional
State Regulation of Free Look Periods
The duration of the free look period depends on the state in which you purchase your annuity. The regulations vary widely.
A few states require longer free look periods for older adults, including Arizona, California and Florida. Virginia requires a 10-day free look period for replacement contracts, but the state has no legal requirement for new annuities.
Other states, like Colorado and Vermont, have no legally required free look periods. Meanwhile, states like Maine and New Mexico require free look periods only if the annuity company failed to provide the purchaser with the required consumer guide information.
Regardless of the individual state’s requirement, annuity providers everywhere are allowed and encouraged to include free look periods in their contracts. Even in states where no free look period is required by law, officials say free look periods are standard practice with little or no deviation.
Brenda Clark, a consumer services administrator with the Vermont Department of Financial Regulation, told Annuity.org that “no company has ever pushed back” on providing consumers with contracts that abide by this standard.
If your contract doesn’t include a free look period provision, you should ask why it doesn’t.
State Requirements for Free Look Periods
State
Free Look Period Minimum Requirements
Alabama
15 days when the buyer’s guide and disclosure document are not provided at or before the time of application
Alaska
10 days
Arizona
10 days, or 30 days if the purchaser is 65 years old or older
Arkansas
10 days when the buyer’s guide and disclosure document are not provided at or before the time of application
California
30 days
Colorado
No legal requirement
Connecticut
10 days
Delaware
10 to 15 days
Florida
21 days
Georgia
10 days
Hawaii
15 days when the buyer’s guide and disclosure document are not provided at or before the time of application
Idaho
20 days when the buyer’s guide and disclosure document are not provided at or before the time of application
Illinois
10 days
Indiana
10 days
Iowa
10 days
Kansas
10 days
Kentucky
10 days
Louisiana
10 days
Maine
15 days
Maryland
10 days
Massachusetts
20 days
Michigan
10 days
Minnesota
10 days for a new policy30 days for a replacement policy
Mississippi
No legal requirement
Missouri
10 days
Montana
15 days when the buyer’s guide and disclosure document are not provided at or before the time of application
Nebraska
10 days for a new policy30 days for a replacement policy
Nevada
10 days for a new policy30 days for a replacement policy
New Hampshire
15 days when the buyer’s guide and disclosure document are not provided at or before the time of application
New Jersey
10 days
New Mexico
15 days when the buyer’s guide and disclosure document are not provided at or before the time of application
New York
10 to 30 days
North Carolina
10 days for a new contract30 days for a replacement contract
North Dakota
10 days
Ohio
15 days when the buyer’s guide and disclosure document are not provided at or before the time of application
Oklahoma
15 days when the buyer’s guide and disclosure document are not provided at or before the time of application
Oregon
10 days for a new contract30 days for a replacement contract
Pennsylvania
10 days for a new contract20 days for a replacement contract
Rhode Island
20 days
South Carolina
10 days, or 30 days if sold by mail order
South Dakota
10 days
Tennessee
10 days
Texas
20 days for a new contract30 days for a replacement contract
Utah
10 days
Vermont
10 days
Virginia
10 days for a replacement contractNo legal requirement for a new contract
Washington
10 days
West Virginia
15 days
Wisconsin
30 days for a replacement contractNo legal requirement for new contracts
Wyoming
30 days for a replacement contractNo legal requirement for a new contract
Frequently Asked Questions About Annuity Free Look Periods
When does the free look period begin?
The free look period for an annuity usually begins on the day you receive your annuity contract.
Do fixed annuities have a free look period?
Fixed annuities, like all types of annuities, have a free look period of 10 to 30 days during which you can cancel your contract with no surrender charges in most states.
Please seek the advice of a qualified professional before making financial decisions.
Last Modified: August 22, 2023
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South Dakota Legislature. (2023). Codified Law 58-15-8.1. Notice of Right of Cancellation After Receipt of Policy – "Free Look" Provision. Retrieved from https://sdlegislature.gov/Statutes/58-15-8.1
Illinois Department of Insurance. (2022, March 8). Individual Annuity Flexible Premium Review Requirement Checklist. Retrieved from https://idoi.illinois.gov/companies.html
