Coping with Covid-19: What life insurers are doing to help policyholders

Bavadharini KS BL Research Bureau | Updated on March 25, 2020

The measures range from extended grace periods to expedited claims settlement

As coronavirus cases rise in India, corporates across the country have started taking precautionary measures to contain its spread while also continuing to service their customers.

Life insurance companies including LIC, SBI Life and ICICI Pru Life are opting for alternative modes such as telephone and digital to reach out to policyholders, and are offering relaxations wherever necessary.

According to a recent circular from insurance regulator IRDAI, life insurance companies are allowed to extend the due date on premium payment. Further, they can consider developing a quicker claim settlement process in virus-hit areas. They are also required to provide information on their websites on the admissibility of Covid-19 death claims for all the policies issued.

Grace period extension

Life insurers have been asked to extend the grace period by an additional 30 days if desired by the policyholders. This is for premiums falling due in March. Grace period is the maximum number of extra days allowed by the insurance company for renewal premium payment beyond the actual due date. Usually, it is given for a period of 30 days (for quarterly, half-yearly and annual premium payment) from the date on which the premium falls due. For monthly premium payment, the grace period is 15 days.

LIC recently announced a facility to extend the due date of premium payment up to April 15 for in-force policies. ICICI Pru Life and SBI Life, too, have extended the grace period by 30 days. Soon, other life insurers may follow suit.

It is important to pay premium dues on time to ensure the continuation of the benefits of the policy. Failure to do so leads to policy lapses.

SBI Life has launched a revival campaign for individual policies up to March 31 this year. This means your lapsed policy can be revived without any late payment penalty. Similarly, ICICI Pru Life has offered to revive policies that have lapsed in the last 6-12 months. It is also waiving additional charges such as reinstatement and late payment fees.

Other facilities

Life insurers already have digital platforms in place to handle policyholders’ requests such as checking claim status, fund value, units allocated, premium amount and due date, payment history, annual unit statements, premium receipt, tax certificate and soft copies of the policy. With offices/branches of insurers temporarily closed amid the spread of coronavirus, insurance companies have taken initiatives to encourage policyholders to access their services through digital touch points such as WhatsApp, mobile app, chatbot and e-mail.

For instance, BOING, a chabot from Bajaj Allianz Life, displays the plans available and premium to be paid. It also offers services such as claim status, renewal premium, policy status, premium receipts and change payment frequency.

Most insurers also accept claims online. For instance, ICICI Pru Life can settle death claims within a day after the receipt of mandatory documents such as death certificate, policy document and identification and age proof of the beneficiary. This is provided the policy has been active for three continuous years, the claim amount is less than or equal to ₹1.5 crore and the claim does not require any investigation.

Aditya Birla Sun Life, in addition to the existing digital claim settlement procedures, has a dedicated claim relationship manager to facilitate quick and speedy settlement of coronavirus-related claims.

Published on March 25, 2020

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