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IRDAI again Extends Life Insurance Grace Period to 31st May

By Finserv MARKETS - May 28,2020
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COVID-19: Irdai again extends grace period for life insurance policies to 31st May 2020

These are tough times, and not just for global health, but also for global finance. While industries are gearing up for an inevitable recession, personal finances are also under threat. Industries like aviation, tourism, media, and IT in particular are witnessing major pay cuts and layoffs. Companies can neither afford to pay bonuses nor keep spending the same amount on retaining employees, in some cases. As per the National Sample Survey and Periodic Labour Force Surveys in March, over 136 million non-agricultural jobs are at immediate risk.

In such a situation, the working class is making significant adjustments to its financial planning. Hence, it is evident that regular payments like premiums will be difficult to maintain. The RBI had announced an EMI moratorium for loans due to this very reason. In a similar step, the IRDAI (Insurance Regulatory and Development Authority of India) had also announced an extension of the grace period for renewal of life insurance policies, not once but thrice since the lockdown began.

Previous announcements regarding life insurance policy extension

The first life insurance grace period extension announcement was made on March 23, when the IRDAI had declared that an additional grace period of 30 days would be given to policyholders whose premium was due in March and April.

The IRDAI added that insurers should continue operations via alternate modes such as telephonic and digital. All insurers had also been asked to display information about the functioning of their offices and arrangements for premium payments, renewal, claim settlement, and service requests, etc. on their websites.

On April 4, the IRDAI made yet another announcement for life insurance grace period extension.

Latest extension of grace period for life insurance policies to 31st May 2020

In the latest development, on the 10th of May, 2020, the IRDA made a similar announcement once again, in an effort to provide relief to insurance policyholders and help them continue with their policies.

The IRDAI declared that the grace period for premium payment or renewal which was due in March, has now been pushed till May 31, in the light of the extended lockdown.

Why the life insurance policy extension

The main objective of the life insurance grace period extension is to ensure that policyholders are able to retain their policies by paying premiums within the grace period. This decision was made because of a number of policyholders finding it difficult to make premium payments within the due date in March, as a result of the lockdown and the ensuing problems. Life insurance is an essential financial instrument at this time and it is crucial to not lose the security it provides.

The IRDAI also encouraged insurers to collect payments online, as all insurers have online facilities. Policyholders have also been encouraged to avail online facilities and avoid trips to the office so as to follow lockdown and social distancing norms.

Conclusion

This is indeed a good move on the IRDAI’s part. Given all the uncertainty and the health scares looming around us, a term insurance policy is one of the things that can provide us the sense of security we need. It is important that you try to maintain your policy by renewing it within the extended date. In case you don’t have a policy yet, you can get one within minutes, at Finserv MARKETS.

Bajaj Allianz Smart Protect Goal Term Plan, available on Finserv MARKETS, is an affordable plan that provides the benefit of a large sum assured at a low premium. It is flexible to the point of giving you a chance to customize your plan as per your requirements and buy multiple add-on covers too. With an extensive cover of upto Rs.1 crore available at low premium, you and your family can be secure against all odds.

Finserv MARKETS, a subsidiary of Bajaj Finserv, is a one-stop digital marketplace that has been created for consumers on the go. It offers 500+ financial and lifestyle products, all at one place. At Finserv MARKETS, we understand that every individual is different. And that’s why we have invested in creating a proposition – Offers You Value. A value proposition that ensures you get offers which are tailor made for you. We also offer an amazing product range and unique set of online offers across Loans, Insurance, Investment, Payments and an exclusive EMI store. Be it in helping you achieve your financial life goals or offering you the latest gadgets, we strive to offer what you are looking for. From simple and fast loan application processes to seamless and hassle-free claim-settlements, from no cost EMIs to 4 hours product delivery, we work towards fulfilling all your personal and financial needs. What’s more! Now enjoy the same benefits in just one click with our Finserv MARKETS App.

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Bajaj Finserv Direct Limited ("BFDL"), erstwhile Bajaj Financial Holdings Limited is a registered corporate agent of Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited under the IRDAI composite registration number CA0551 valid till 10-Apr-2021. BFDL also renders services to Bajaj Finance Limited (‘BFL’) and Bajaj Housing Finance Limited (‘BHFL’) (referred hereinafter as ‘Lending Partner’) in sourcing of customers, providing preliminary credit support activities, fulfilment services and post-acquisition customer services related to lending business. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522