In a major relief for life insurance policyholders amid the coronavirus crisis, the Insurance Regulatory and Development Authority of India (IRDAI) has extended the deadline for paying a premium of life insurance policies, by another 30 days, which were 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.
In another major move, IRDAI said that in cases where unit-linked policies mature and fund value is to be paid in lump sum, life insurance companies may offer settlement options in accordance with Regulation 25 of IRDA (Linked Insurance Products) Regulations, 2013.
"This onetime 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 NAV and clear consent has to be obtained from the policyholder," said the circular dated April 4.
The relaxation is allowed for unit-linked policies maturing up to May 31, 2020, it said.