Customers who hold life and health insurance now have options to defer premium payments for up to six months if they hold policies with renewal or premium due dates between April 1 and Sept 30.
Customers will still be covered by their policies during the deferment period and no interest will be charged during that time. If there is a claim during the grace period, the unpaid premiums will be deducted from the claims payout amount.
But if customers cannot pay the premiums even after the deferment period, life insurance and health policies that do not have cash values will lapse.
Those holding life insurance policies with cash value, such as endowment policies, can look to other options. These include changing the policy to a paid-up one that has a reduced sum assured and no further premium payments so that coverage can still continue. They can also choose an automatic premium loan with chargeable interest. This involves the insurer providing the customer with a loan against the policy’s cash value to pay the immediate premium due.
The cash value of the policy will not be affected when the customer pays the loan and interest.
The Monetary Authority of Singapore said: “Near the end of the grace period, you can reassess your financial situation and you can choose to engage your insurer on existing options such as automatic premium loan if necessary.”