Worried About Insurance Premium Payments Amid Lockdown? Here’s Relief…
Listen to Worried About Insurance Premium Payments Amid Lockdown? Here’s Relief…
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If you recall my elderly neighbour Mr Sharma, who had dropped by last month to discuss his portfolio's underperformance. He rang me up last evening to seek my advice regarding the insurance premium payment.
"If you are aware, due to the nationwide lockdown I don't step out at all these days even to buy groceries, I think my medical and motor vehicular insurance policies might lapse."
"Why? What's happened?" , I inquired.
"Usually, I visit the insurance office to give my premium cheque to renew policies; this year since there is lockdown, I am afraid I won't be able to renew my policy on 10th of April. Failure to pay my renewal premium will lead to policy lapse."
In a calm voice I told him, "Relax! The government especially the Ministry of Finance, on April 1, 2020 has notified that, the policy holders, who have to renew their existing policies from March 25, 2020, to April 14, 2020 has been extended and can do it till 21st April 2020."
"Wow! That's relieving news, but is it for all the insurance policies?"
I explained: "As per the recent notification, the extension is for health and third party motor insurance renewals".
Health insurance policy
As per the notification, 'The policyholders whose health insurance policies fall due for renewal during the period on and from the 25th March 2020 to the 14th April 2020 and who are unable to make payment of their renewal premium on time in view of the prevailing situation in the country as a result of Corona Virus disease (COVID-19), are allowed to make such payment for renewal of policies to their insurers on or before the 21st April 2020 to ensure continuity of the health insurance cover from the date on which the policy falls due for renewal.
If one fails to do so, the policy holder will lose the benefit of the waiting period in the policy'.
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[Read: Health Insurance Holders to Benefit from IRDAI's Proposal on Proportionate Deduction]
Third Party Motor Vehicle Insurance
Similarly in the case of renewal of motor vehicle third party insurance policies falling during the period of lockdown due to outbreak of covid-19 pandemic, the notification states, 'The policyholders whose motor vehicle third party insurance policies fall due for renewal during the period on and from the 25th March 2020 up to the 14th April 2020 and who are unable to make payment of their renewal premium on time in view of the prevailing situation in the country as a result of Corona Virus disease (COVID-19), are allowed to make such payment to their insurers on or before the 21st April 2020 to ensure continuity of the statutory motor vehicle third party insurance cover from the date on which the policy falls due for renewal.'
"That's great, and hopefully the situation should improve by then" , Mr Sharma said.
I responded in an affirmative and added, "You can even renew it online by going on the insurer's webpage."
"That's nice, thank you for updating me."
Further I added, "Given the current lockdown situation, investing via online platforms is convenient. As most of the insurers have an online renewal option as well. Online platforms are an easy and convenient way to facilitate insurance needs. But one should also be wary of online frauds and refrain from sharing personal/confidential information that may put your finances at risk and cause you loss. Choose only the official websites for transaction purposes."
We ended the call on a hopeful note of improvement in coronavirus situation.
Conclusion:
The current time of the pandemic has disrupted every aspect of our day-to-day life situations. To safeguard people against infection, vide the lockdown, manufacturing companies, schools, colleges, businesses, etc. have been affected immensely. Hence, the government has taken this decision as a relief measure to ease the EMIs and insurance premium burden.
Remember, insurance is a tool purely for Risk Management and is an integral aspect in the exercise of financial planning and must be undertaken with utmost care. Buying insurance is a continuous activity. Every individual's needs change over a period of time. This, in turn, necessitates a review of your insurance requirement.
Financial and health security are the basic tenets for an individual; the purpose of insurance is indemnification of risk from an untoward event. However, as far as wealth management is concerned, it is best to keep insurance and investment needs separate.
No matter how young you are, don't procrastinate about taking an optimal life insurance cover, as no one can foretell when life will change its course.
Warm Regards,
Aditi Murkute
Senior Writer
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