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The Insurance Regulatory and Development Authority of India provides an additional grace period for life insurance policies and permits settlement options for unit linked policies. Life insurers apply a thirty-day grace period for policies with premiums due in March and April 2020. Life insurers offer settlement options for unit linked policies maturing up to 31 May 2020 when fund value is paid in a lumpsum. This option applies regardless of whether the option exists in the specific product. Life insurers explain downside risks of daily net asset value fluctuations and obtain clear consent from the policyholder.
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[Image omitted. See the official document.]
Ref: IRDAI/Life/Cir/Misc/078/04/2020
4th April 2020
Sub: Global Pandemic Covid19 related Instructions to Life Insurers
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. Therefore further to Circular Ref: IRDA/Life/Cir/Misc/072/03/2020 dated 23rd March 2020, the following instructions are issued.
Additional Grace Period For life insurance policies whose premiums fall due in March and April 2020: 30 days
Settlement Options for maturity payout of Unit Linked Policies Where unit linked policies mature and fund value is to be paid in lumpsum, Life Insurers 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. This is allowed for unit linked policies maturing up to 31st May 2020.
This is issued with the approval of the Competent Authority.
(K Ganesh) Member (Life)
