“As the closure has been further extended until May 17, 2020, given the difficulties for some policyholders in renewing the policies in time, the regulator has now allowed extended grace periods until May 31, 2020 for all policies where the premium should payable in March 2020, “stated the circular issued by the Indian Insurance and Development Authority (IRDAI) on May 9th.
Earlier on April 4, the regulator had announced a further 30-day redundancy period for policies with premiums falling due in March and April 2020. This was done to provide relief to life insurance companies amid the Covid-19 lockdown.
The nationwide lockdown started on March 25 for 21 days. Since then, it has been extended twice to May 17. This is why IRDAI has allowed to extend the installment period up to May 31 for all life insurance policies whose premium should occur in March, as it is difficult for some policyholders to renew the policies on time.
IRDAI said, “All insurance owners are asked to note that the goal of the allowable period is to pay all the premiums payable within that period to keep the policy coverage in effect.”
Life insurance companies are equipped to allow you to pay premiums online. Policyholders are encouraged to make use of this provision to minimize their personal visits to insurance companies’ offices under the Circular.
What does this mean for the policyholder?
Dhirendra Mahyavanshi, co-founder, Turtlemint – a Mumbai-based InsurTech company, said it is a big gesture for IRDAI to be considerate of customers and also the insurance companies. “The grace period has been extended once again for the purpose of collecting life insurance premiums. Since all customers may not have the facility or are equipped to pay the premiums online, the extension would be most welcomed,” he said.
In the current scenario of the lockdown expansion, employees as well as small business owners may have some difficulty managing their cash flow. Mahyavanshi said extending the repayment period would save customers from enjoying the continuity benefit of the insurance plans by carefully planning their expenses. “In fact, it would also be a boon to the insurers so that they can continue to settle the claims on time as there would be no increase in the lapsed policies which could lead to cash flow problems for the insurers. It is a total win-win situation for everyone, ”I added.
Point to note
If your health and car insurance renewal date covered between March 25, 2020 and May 3, 2020, you still have time to renew the policies until May 15, 2020.