The Insurance Regulatory and Development Authority of India (Irdai) has offered an additional 30-day grace period for life insurance policyholders to pay their premium. This is for policyholders whose renewal date falls between March and April amid the lockdown to fight against the COVID-19 pandemic.
The regulator brought in this relief in addition to the extended time offered to policyholders for payment of renewal premium in case of both motor third-party insurance and health insurance policies.
Irdai clarified in a circular that this one time option will be applicable regardless of whether such an option exists or not in the specific product for policyholders. The regulator issued the instructions for providing the additional grace of 30 days for premium payments, responding to representations made by life insurers and Life Insurance Council.
Manu Lavanya, Director and Chief Operations Officer of Max Life Insurance said, “This move will help in ensuring the continuity of policies for all customers whose premium is due in March and April. It will especially benefit policyholders who are currently facing business disruptions, and allow them to avail of all policy benefits during the grace period.”
IRDAI further added for Unit Linked Insurance Policies (ULIPs) mature up to May 31, 2020, fund value needs to be paid in lump-sum. Life insurers could offer settlement options in accordance with relevant regulations.
Casparus Kromhout, MD and CEO, Shriram Life Insurance says, “Insurance is a critical requirement of the population, and it is essential that its services continue especially during these difficult times. With this unprecedented and difficult time along with the current lockdown and looming uncertainty, it is understandable that there might be some confusion in the minds of policyholders. The authority’s extension ensures that policyholders have sufficient time to pay their premiums without losing life cover.”
Additionally, few life insurers such as Tata AIA Life Insurance have already announced the extension of the grace period via Whatsapp and SMS. Rishi Srivastava, Managing Director, and CEO, Tata AIA Life Insurance says, “Anything that enables the consumer to stay protected is in line with our efforts. I can safely speak on behalf of the industry that we stand committed to the policyholder and are taking all measures to ensure that they stay protected.” He further says, “This is currently necessary to enable policyholders to continue with their protection cover. These are unprecedented times and unprecedented measures are needed to ensure the protection of policyholders, so that the policy cover of consumers does not lapse.”
Last week, Irdai had said motor third party insurance and health insurance premiums can be paid on or before April 21, 2020, that is falling from March 25 to April 14, 2020, wherein risk cover will continue from the due date of renewal of such policies.