Life Insurance policyholders get 30 more days to pay the premium

Amid the on-going nationwide lockdown imposed due to the coronavirus, COVID-19, pandemic, the Insurance Regulatory and Development Authority of India (IRDAI) has extended the deadline for paying the premium of life insurance policies, by another 30 days, which was originally scheduled to be paid in March and April.

The insurance sector regulator had earlier provided a similar additional grace period to those life insurance policyholders whose premium was due for payment in March.

"This has reference to the representations received from Life Insurers and the Life Insurance Council expressing various operational constraints and difficulties being faced by policyholders due to nationwide three-week lockdown and social distancing norms," an IRDAI circular said.

This additional grace period is over and above the 30-day grace period, from the due date which is available to pay the premium without any interest charges.

The regulator, IRDAI, further said in cases where unit-linked policies mature (up to May 31, 2020) and fund value is to be paid in a lump sum, life insurance companies may offer settlement options under the Regulation 25 of IRDA (Linked Insurance Products) Regulations, 2013.

"This one time option is regardless of whether such option exists or not in the specific product. The Life Insurers, however, have to exercise all due care and diligence to explain clearly the possible downside risk of continued fluctuation of fund value based on daily net asset value (NAV) and clear consent has to be obtained from the policyholder," said the circular dated April 4, 2020.

Last week, IRDAI had said motor third party insurance and health insurance premium, falling from March 25 to April 14, 2020, can be paid on or before April 21, 2020. Risk cover will continue from the due date of renewal of such policies.

Meanwhile, IRDAI has also provided insurers additional time for filing regulatory returns. In case of filing monthly returns, the additional time is 15 days, while in the case of the quarterly, half-yearly and yearly returns insurers will get 30 days more.