In California, an annuity sold to a buyer aged 60 or older must allow at least 30 days to return it after receipt, and a fixed annuity returned in that window gets a full refund (California Insurance Code section 10127.10, operative July 1, 2015, checked October 14, 2026).
What the free look period is
The free look period, also called the right to examine or right to return, is a set number of days after you receive a new annuity during which you can cancel it without a surrender charge. The SEC describes it as usually 10 to 30 days for variable annuities and says the contract should prominently state how long it is and how to return it (Investor.gov, Variable Annuities, checked October 14, 2026).
The sales conversation may treat the signature as the finish line. The contract says otherwise: the notice on the cover page or first page tells you exactly how many days you have. Find it the day the policy arrives.
The free look is a fair protection, not a loophole. If you keep the annuity, reading it closely in this window is still worth the time.
How long it lasts: it depends on your state and your situation
State law sets the minimum, and the insurer can offer more. Three rules push the period longer:
- Age. California requires at least 30 days for annuities delivered to anyone 60 or older (California Insurance Code 10127.10).
- Replacement. The NAIC replacement model regulation (Model 613) has the new insurer give notice of a right to return a replacement contract within 30 days of delivery (NAIC Model 613, 2015 edition).
- Missing paperwork. The NAIC annuity disclosure model calls for a free look of at least 15 days if you did not get the buyer's guide and disclosure document at or before application (NAIC Model 245, 2021 edition).
The National Association of Insurance Commissioners (NAIC) writes model rules; each state adopts its own version. The table below shows large states we verified from the statute or regulation. If your state is not listed, the period is printed on your contract, and your state insurance department can confirm it.
| State | Annuity free look rule | Source |
|---|---|---|
| California | At least 30 days for buyers 60 or older. Fixed annuities: full refund. Variable: premium, or account value if you directed the money into the portfolios. | Insurance Code 10127.10 |
| Texas | 20 days. Replacement annuities: 30 days. Full refund during the period. | Texas Department of Insurance, Annuities guide (updated October 16, 2023) |
| Florida | Unconditional refund for at least 21 days on fixed and variable annuities. | Florida Statutes 626.99(4)(b) |
| Arizona | 10 days, or 30 days if you are 65 or older on the application date. Refund of all monies paid (variable annuities figured differently). | Arizona Revised Statutes 20-1233 |
| Michigan | At least 10 days after you receive the contract. Refund of premium and fees (variable annuities figured differently). | Michigan Compiled Laws 500.4073 |
| New Jersey | 10 days; 15 days if the buyer's guide was not provided as required. Replacements: 30 days from delivery. | N.J.A.C. 11:4-59.3; N.J.A.C. 11:4-2.4 |
| Ohio | At least 15 days if the buyer's guide and disclosure were not given at or before application. Replacements: 30 days from delivery. | Ohio Admin. Code 3901-6-14; 3901-6-05 |
| North Carolina | At least 15 days if the buyer's guide and disclosure were not given at or before application. Replacements: 30 days. | G.S. 58-60-135; 11 NCAC 12 .0612 |
| Pennsylvania | Replacements: unconditional refund of all premiums within 20 days from delivery. For new purchases, check the notice in your contract. | 31 Pa. Code 81.6 |
Rules change and have exceptions, such as group contracts. Rely on the notice in your own contract.
When the clock starts
The count usually starts when the contract is delivered to you, not when you signed the application or when the money moved. California's required notice says the policy may be returned within 30 days from the date you received it. Model 613 counts its 30 days from delivery.
That makes the delivery record important. Many insurers ask you to sign a delivery receipt, or they record an electronic delivery date. Keep a copy, and write the date the package arrived on the envelope.
What you get back
The NAIC buyer's guide says that, depending on the state, you will get back either all of your money or your current account value (NAIC Buyer's Guide for Deferred Annuities, revised 2013). For fixed annuities, many state rules require a refund of the premium. California's required notice for non-variable annuities calls it a full refund, and Arizona's statute says a refund of all monies paid.
Variable annuities are different, because your money may already be in the market. Under California law, if your premium sat in a fixed account or money market fund during the 30 days, you get your premium back; if you directed it into the investment portfolios, you get the account value on the day the insurer or agent receives the policy, which could be less than you paid, plus any policy fee. The SEC says a variable annuity refund may be adjusted up or down to reflect investment performance. Model 613 uses cash surrender value plus deducted fees for variable and market value adjustment (MVA) replacement contracts. Ask which rule applies to yours.
How to cancel an annuity, step by step
- Find the right to return notice on the cover page and count the days from delivery.
- Write a short, signed letter to the insurance company: your name, contract number, the words "I am exercising my free look right and cancelling this contract," and where the refund should go.
- Send it to the address in the contract by certified mail with return receipt, or another trackable method the contract allows. California law lets you return it by mail or other delivery method to the insurer or the agent; sending to the insurer directly is the safer record.
- Return the contract itself if the notice asks for it. Keep copies of the letter, the contract pages, the delivery receipt and the mailing receipt.
- Call the insurer a few days later to confirm receipt, and write down the date and the name of the person.
- If the money came from an IRA, a 401(k) or a 1035 exchange, ask in writing how the refund will be sent so it keeps its tax treatment, and check with a tax professional.
- If the annuity replaced an older contract, ask the old insurer in writing whether that contract can be reinstated.
If the insurer does not respond or refuses, contact your state insurance department. The NAIC state insurance department directory lists every one.
After the free look ends
Once the window closes, getting out usually means a surrender charge, a possible market value adjustment and income tax on any gain. Keeping the contract can make sense if it still fits your plan; the free yearly withdrawal and waiting out the schedule are the usual options. See surrender charges and how to get out of an annuity.
A plain example: refund inside vs outside the window
All numbers are hypothetical. Suppose you put $500,000 into an annuity, change your mind, and compare three outcomes.
| Situation (hypothetical) | Amount back |
|---|---|
| Fixed annuity returned inside the free look | $500,000 |
| Variable annuity invested in portfolios that fell 3%, returned inside the free look ($500,000 x 97%) | $485,000 |
| Fixed annuity surrendered one week after the free look, 7% charge ($500,000 - $35,000) | $465,000 |
A few days can be worth $35,000 here. In the variable case, the refund follows the account value because the money was invested at your direction; had it stayed in the fixed or money market option, California rules would return the full premium.
Red flags
- A seller who tells you the free look does not apply to your contract.
- Delivery of the contract delayed, or a delivery receipt you are asked to sign before you see the contract.
- A delivery receipt dated earlier than the day you actually received the policy.
- Pressure to move a variable annuity into the stock portfolios immediately, during the free look.
- Being told to cancel by phone only, with nothing in writing.
- A suggestion that cancelling will hurt your relationship with the seller or cost you a fee.
- Calls from the seller during the free look that discourage you from reading the contract.
- A replacement sale where no one mentions the longer free look that often applies.
- A refund sent to you as a check when the money came from an IRA or a 1035 exchange, without anyone explaining the tax effect.
- An insurer that does not confirm receipt of your cancellation letter.
Questions to ask before you sign
- How many days is my free look period, and where is it printed in the contract?
- Does the clock start on delivery, on the date I signed, or on electronic delivery?
- Is this a replacement, and if so, is my free look longer?
- If I cancel, do I get back my premium or the account value?
- Where will my premium sit during the free look if this is a variable annuity?
- What is the exact mailing address for a cancellation letter?
- Can I send the cancellation to the insurer directly rather than the seller?
- How long will the refund take after you receive my letter?
- If the money came from an IRA or a 1035 exchange, how will the refund be sent?
- If this replaced an older contract, can the old one be reinstated?
- What surrender charge would apply the day after the free look ends?
Read This Before You Sign
A one-page checklist: the red flags in annuity and indexed universal life (IUL) sales, and the questions to ask before you sign anything. Find your free look deadline, write the cancellation letter and keep the records that prove you sent it on time. We’ll email it to you.
The Retirement Literacy Foundation is a 501(c)(3) public charity (EIN 41-5062266). General education, not tax, legal or investment advice. Nothing is sold here. Unsubscribe any time.
Sources
- California Legislature: Insurance Code section 10127.10 (operative July 1, 2015; text via California Public Law, checked October 14, 2026)
- NAIC: Buyer's Guide for Deferred Annuities (revised 2013)
- NAIC: Life Insurance and Annuities Replacement Model Regulation, Model 613 (2015 edition)
- NAIC: Annuity Disclosure Model Regulation, Model 245 (2021 edition)
- Investor.gov (SEC): Variable Annuities (checked October 14, 2026)
- Texas Department of Insurance: Annuities consumer guide (updated October 16, 2023)
- Florida Legislature: Florida Statutes 626.99, 2026 (checked October 14, 2026)
- Arizona Legislature: Arizona Revised Statutes 20-1233 (checked October 14, 2026)
- Michigan Legislature: MCL 500.4073 (checked October 14, 2026)
- NAIC: State insurance department directory (checked October 14, 2026)
The Retirement Literacy Foundation is a 501(c)(3) public charity. This page is general education, not tax, legal or investment advice. Nothing is sold here, no product is recommended, and RLF accepts no funding from financial companies. Rules and figures change; each one above shows its source and date. Check anything you plan to act on with your state insurance department or a qualified professional who is not paid on the product.