At the end of last week (18 September 2020), the Life Insurance Association, Singapore (LIA Singapore) and General Insurance Association of Singapore (GIA Singapore) announced in separate press releases extensions to the deadlines to apply for deferment of premium payments, which were originally part of MAS’ special COVID-19 relief measures announced in April 2020.
Here’s what policyholders need to know about this latest extension of deadlines for deferring premium payments.
LIA Singapore: New Window For Applying For Premium Deferment Till 31 March 2021
This measure was introduced to ensure policyholders who might be facing financial difficulties do not lose their health and life insurance coverage.
Under the Deferred Premium Payment (DPP) scheme, policyholders can apply to their insurers to defer premium payments for up to six months while maintaining insurance coverage during deferment period.
The initial window for applying for deferment was between 1 April and 30 September 2020. A second window has now opened, from 1 October 2020 to 31 March 2021. Policies that are already on DPP will not be eligible for further deferment, beyond what was already granted previously.
The deferment option applies to all individual life and health insurance policies with a policy renewal or premium due date, and will be subject to insurers’ assessment and approval.
This measure adds yet another option available to Singaporeans to keep their protection costs manageable and sustainable during times of financial distress.
Insurers will engage with policyholders pro-actively on their other options available, such as taking a premium loan, changing their policy to a paid-up one, or “right-sizing” (reducing) their sum assured.
GIA Singapore: New Window For Applying For Premium Deferment Till 31 December 2021
To ease the financial burden for those paying for general insurance policies, such as motor insurance and property insurance, individual and corporate customers can apply their insurer to work out an instalment payment plan, while maintaining insurance protection for paid-up period.
Policyholders can approach their respective general insurance company to find out more and arrange for. Flexible premium instalment payment plans allow policyholders to pay their premiums in smaller amounts and enjoy coverage for the paid-up period, instead of needing to pay a lump sum in premiums for the entire policy period at the start.
With a soft labour market and weak economy as a result of the COVID-19 pandemic, GIA Singapore announced that the window for applying for flexible premium payments will be extended till 31 December 2021.
Better Flexibility Leads To Greater Sustainability For Overcoming This Challenging Period
The extension of these measures by the LIA Singapore and GIA Singapore are timely and shows their responsiveness to provide ongoing support to their customers.
This greater flexibility would undoubtedly be much appreciated by those whose income and financial situation has been adversely affected by the economic fallout from COVID-19.
In a win-win situation, individuals can continue to fulfil their obligations to financial institutions, while enjoying the benefits of continued insurance coverage, which is needed more than ever amidst the volatile climate.