Written By : Elaine Silvestrini
Edited By : Kim Borwick
Financially Reviewed By : Rubina K. Hossain, CFP®
This page features 51 Cited Research Articles

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Afraid you’ll have second thoughts after you sign your annuity contract? Have no fear. Almost every time you buy an annuity, you’ll have at least 10 days to reconsider and back out if you change your mind.

Most new annuity contracts have a provision called the free look period that gives the purchaser 10 to 30 days to consider the terms of the contract. During this time, which should be prominently indicated in the contract, the buyer can cancel the contract and receive a full refund of their premium without paying surrender charges.

States regulate annuities, and most states require a free look period. Insurance companies can provide longer free look periods than required by law.

Sometimes this is referred to as a grace period. But usually, the term grace period relates to the amount of time you have to make payments past their due date.

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Protection for Annuity Holders

The free look period is one of several reforms that addressed abusive sales tactics in the first half of the 20th century. It’s 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 can ask a lawyer or a financial advisor or a family member to review the policy for you.

And in the end if you decide you don’t want the annuity after all, or you want to purchase one from a different provider, you can cancel your contract without having to explain why, as long as you’re still within the specified free look period. You don’t even have to contact your agent to cancel if you don’t want to. You can just call the insurance agency that issued the annuity. Just remember, the clock starts ticking when your annuity contract is delivered to you.

States Regulate Free Look Periods

The amount of time you have to change your mind about an annuity depends on the state in which you purchase your annuity. And the states are all over the map on this — in more ways than one.

Some states, such as Arizona, California and Florida, require longer free look periods for senior citizens. Other states, such as Alaska, Nevada, Ohio, Oregon and Texas, require longer periods for replacement annuity policies than for new policies.

Wyoming requires a 30-day free look period for replacement policies, but it doesn’t require one for new annuity contracts. Virginia requires a 10-day free look period for replacement contracts, but the state has no legal requirement for new annuities.

Some states, such as Colorado and Vermont, have no legally required free look periods. Other states, such as Maine and New Mexico, require free look periods only if the annuity company failed to provide the purchaser with required consumer guide information.

And yet other states, combine the various requirements. Ohio and Hawaii, for example, require a 10-day free look period for new annuity contracts. That increases to 15 days if the buyer wasn’t provided with required information at the time of purchase. And it goes up to 30 days for replacement annuity contracts.

In Alabama, there’s a 30-day free look period requirement for replacement contracts and a 15-day period when the consumer buyer’s guide and disclosure document aren’t provided at or before the time of application. But when the information is provided on a new contract, the law doesn’t dictate any free look period requirement.

No matter 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
States Free Look Period Requirements
Alabama 15 days when the buyer’s guide and disclosure document are not provided at or before the time of application
30 days for replacement contracts
Alaska 10 days for new policies
30 days for replacement policies
Arizona 10 days
30 days if 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 10 days
30 days for seniors
Colorado No legal requirement
Connecticut 10 days
Delaware 10 days to 15 days
Florida 14 days
21 days for seniors
Georgia 10 days
Hawaii 10 days for new policies
15 days when the buyer’s guide and disclosure document are not provided at or before the time of application
30 days for replacement policies
Idaho 20 days
Illinois 10 days
Indiana 10 days
Iowa 10 days
15 days when the buyer’s guide and disclosure document are not provided at or before the time of application
Kansas 10 days
Kentucky 10 days
30 days for a replacement contract
Louisiana 10 days
Maine 15 days when the buyer’s guide and disclosure document are not provided at or before the time of application
Maryland 10 days
Massachusetts 20 days
Michigan At least 10 days
Minnesota 10 days for new policy
30 days for 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
Nevada 10 days for new policies
30 days for replacement policies
New Hampshire 10 days
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 days to 30 days
North Carolina 10 days
15 days when the buyer’s guide and disclosure document are not provided at or before the time of application
North Dakota 20 days for individual annuity contracts
Ohio 10 days for new contracts
15 days if no illustration given at the time of application
30 days for replacement contracts
Oklahoma 20 days
Oregon 30 days for replacement contracts
Pennsylvania 10 days
Rhode Island 20 days
South Carolina 10 days for new policy
20 days for replacement contract
30 days if solicited by direct response rather than agent
South Dakota 10 days
Tennessee 10 days
Texas 20 days for new contracts
30 days for replacement contracts
Utah 10 days for new policy
30 days for replacement policy
Vermont No legal requirement, but spokeswoman says 10 days is standard
Virginia 10 days for replacement contracts
No legal requirement for new contracts
Washington 10 days (insurance company has 30 days to send refund)
West Virginia 10 days minimum
Wisconsin 30 days for replacement contract
No legal requirement for new contracts
Wyoming 30 days for replacement contract
No legal requirement for new contract

Annuity.org compiled the free look period data from state government websites and email correspondence with state employees. State laws may change, so it’s always best to check with the agency that regulates annuities and insurance in your state to be sure. Also, make sure the free look period is spelled out in your annuity contract.

Please seek the advice of a qualified professional before making financial decisions.
Last Modified: July 16, 2021

51 Cited Research Articles

Annuity.org writers adhere to strict sourcing guidelines and use only credible sources of information, including authoritative financial publications, academic organizations, peer-reviewed journals, highly regarded nonprofit organizations, government reports, court records and interviews with qualified experts. You can read more about our commitment to accuracy, fairness and transparency in our editorial guidelines.

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