Annuity free look period minimum requirements by state

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Published on November 01, 2024 | 5 min read

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An annuity is a financial product that provides a series of regular payments, typically for a fixed period of time or for life. It’s often used to generate income in retirement.

But before you finalize the terms of your annuity contract, you’re granted a special window to review the terms of your investment in more detail.

Each state insurance department sets its own minimum requirement for free look periods. In this article, we’ll explore each state’s standards so you can make the most of this time.

What is an annuity free look period?

A free look period is an important time frame provided by annuity companies to give prospective buyers the chance to carefully review their contract.

This period — typically lasting at least 10 days but varying by state — offers a final opportunity to determine if an annuity aligns with your financial goals. If you’re not satisfied with the contract, you can cancel it within this period and get a full refund.

Your free look period starts when you receive your annuity contract. To make an informed decision, start reviewing this document as soon as you receive it. Annuities can be complex, so consider seeking guidance from a lawyer, financial advisor or tax professional during your free look period.

Free look minimum requirements by state

How long you have to review your annuity contract depends on the state you live in. While insurance companies may offer you more time to review your contact, all companies must grant you at least the minimum number of days required by state law.

A majority of states give you 10 days to review the contract, and some offer more time to review a replacement annuity. Other states — 13 in total — only require insurers to provide you with a free look period if you weren’t given a buyer’s guide and disclosure documents prior to receiving the contract.

Here’s how annuity free look periods break down for each state.

State	Free look minimum requirement
Alabama	15 days. Free look period is only granted if the insurer fails to provide an annuity buyer’s guide and disclosure document at or before the application is submitted.
Alaska	10 days
Arizona	10 days. 30 days if the buyer is 65 years or older.
Arkansas	10 days
California	30 days
Colorado	15 days. Free look period is only granted if the insurer fails to provide an annuity buyer’s guide and disclosure document at or before the application is submitted.
Connecticut	10 days
Delaware	10 days for a new policy. 20 days for a replacement policy.
Florida	21 days
Georgia	10 days
Hawaii	15 days. Free look period is only granted if the insurer fails to provide an annuity buyer’s guide and disclosure document at or before the application is submitted.
Idaho	20 days
Illinois	10 days
Indiana	10 days
Iowa	10 days
Kansas	10 days
Kentucky	15 days. Free look period is only granted if the insurer fails to provide an annuity buyer’s guide and disclosure document at or before the application is submitted.
Louisiana	10 days
Maine	15 days. Free look period is only granted if the insurer fails to provide an annuity buyer’s guide and disclosure document at or before the application is submitted.
Maryland	10 days
Massachusetts	20 days
Michigan	10 days
Minnesota	10 days for a new policy. 30 days for a replacement policy.
Mississippi	No legal requirement.
Missouri	10 days
Montana	15 days. Free look period is only granted if the insurer fails to provide an annuity buyer’s guide and disclosure document at or before the application is submitted.
Nebraska	10 days
Nevada	10 days for a new policy. 30 days for a replacement policy.
New Hampshire	15 days. Free look period is only granted if the insurer fails to provide an annuity buyer’s guide and disclosure document at or before the application is submitted.
New Jersey	10 days
New Mexico	15 days. Free look period is only granted if the insurer fails to provide an annuity buyer’s guide and disclosure document at or before the application is submitted.
New York	10 to 30 days
North Carolina	10 days for a new policy. 30 days for a replacement policy.
North Dakota	10 days
Ohio	15 days. Free look period is only granted if the insurer fails to provide an annuity buyer’s guide and disclosure document at or before the application is submitted.
Oklahoma	15 days. Free look period is only granted if the insurer fails to provide an annuity buyer’s guide and disclosure document at or before the application is submitted.
Oregon	10 to 15 days for a new policy depending on when an annuity buyer’s guide and disclosure document is provided. 30 days for a replacement policy.
Pennsylvania	10 days for a new policy. 20 days for a replacement policy.
Rhode Island	20 days
South Carolina	10 days. 30 days if the annuity is sold by mail order.
South Dakota	10 days
Tennessee	10 days
Texas	20 days for a new policy. 30 days for a replacement policy.
Utah	10 days for a new policy. 30 days for a replacement policy.
Vermont	No legal requirement.
Virginia	No legal requirement for new contracts. 10 days for replacements.
Washington	10 days
West Virginia	15 days. Free look period is only granted if the insurer fails to provide an annuity buyer’s guide and disclosure document at or before the application is submitted.
Wisconsin	30 days for a replacement policy.
Wyoming	15 days. Free look period is only granted if the insurer fails to provide an annuity buyer’s guide and disclosure document at or before the application is submitted.

Why is an annuity free look period important?

The free look period is your last chance to evaluate an annuity and cancel the contract before the terms become legally binding. After the period ends, canceling or withdrawing can result in hefty surrender charges and penalties.

The free look period is designed to protect you and your financial interests. That’s important because some annuities require large up-front investments on your part. Immediate annuities, for example, are relatively simple and straightforward, but may require a lump sum of $100,000 or more to generate meaningful income in retirement.

Meanwhile, variable annuities may allow for a series of deferred payments over time, but the contract language and how the annuity generates returns can be extremely complicated. Many variable annuities are packed with fees and qualifying terms, so you may need a few days to thoroughly review it.

Finally, regardless of the type of annuity, it’s generally very difficult to get your money out once you begin receiving payments from the insurer.

While you may be able to withdraw a small portion of the principal each year at no cost, you can’t easily liquidate the annuity like you can with stocks or other investments in your brokerage account. Not only will you pay ordinary income taxes on some or all of the money you withdraw, you’ll also get slammed with surrender charges or withdrawal penalties, making it not only challenging but expensive to access your money.

The free look period is important because you want to make sure buying an annuity is the right fit for your finances in retirement. Otherwise, you could get stuck in an investment you don’t understand, or that doesn’t provide the benefits you thought it would.

Bottom line

The free look period offers extra time to carefully examine an annuity contract and make an informed decision. If you’re unsure about anything, don’t hesitate to contact the insurance company, or seek professional help from a financial advisor. There aren’t many second chances in finance, so use this time wisely and make sure the annuity truly meets your needs.

Written by

Rachel Christian

Investing reporter

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