Insurance Regulatory and Development Authority of India (Irdai) has extended the grace period for payment of renewal premium of life insurance policies because of demonetisation. Here’s how it will benefit life insurance policyholders.
– The insurance regulator has allowed the extension of grace period for renewal premium by an additional 30 days for all policies issued by life insurers where the premium falls due on or after November 9 till December 31, 2016.
– This special one-off dispensation is given by Irdai so that policyholders do not have to suffer from non-payment of due premiums due to cash crunch.
– The extension in the grace period was given by the regulator after receiving representation from Life Insurance Council.
– At present, life insurers themselves give a grace period of 15 days.
– The payment of premium on time or within the grace period for all life insurance policies helps in continuity of the policy.
– If the renewal premium is not paid even within the grace period, the insurer will refuse any benefit to the claimants in case of any eventuality.
– For digital payments, a policyholder can opt for ECS facility by giving mandate to his bank to transfer the renewal premium amount on each due date to the account of the insurer.
– The policyholder can also pay the renewal premium through net banking.