Life insurance policy holders get 30 days more to pay premium, amid the lockdown

Regulator Irdia has provided an additional 30-day grace period for policyholders to pay premium on life insurance policies, whose renewal date fall in March and April amid the lockdown to fight against coronavirus pandemic. Insurance Regulatory and Developement Authority of India (Irdai) has already provided additional time for payment of renewal premium in case of health insurance policies and motor third party insurance.

Responding to representations made by life insurers and Life Insurance Council, the regulator issued the instructions for providing the additional grace of 30 days for premium payments.

The insurers and the council had flagged operational constraints and difficulties being faced by policyholders due to the nationwide three-week lockdown and social distancing advisory.

Irdai further said where unit linked policies mature (up to May 31, 2020) and fund value is to be paid in lumpsum, life insurers "may offer settlement options" in accordance with relevant regulation.

"This one time option is regardless of whether such option exists or not in the specific product," Irdai said in a circular.

Life insurers, however, will 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).

Last week, Irdai had said motor third party insurance and health insurance premiums -- falling during March 25 to April 14, 2020 -- can be paid on or before April 21, 2020. Risk cover to 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 case of quarterly, half yearly and yearly returns insurers will get 30 days more.