The insurance regulator has provided some relaxations to policyholders by giving them a grace period of 30 days to pay their premiums if they are falling due between March and April 2020.
The unit-linked policyholders have also been provided relief by the insurance regulator wherein the regulator has asked insurers to offer settlement options in accordance with Regulation 25 of linked insurance products. Under the regulations, the period of settlement may be extended till five years from the date of maturity and not beyond.
The regulations further say that the insurer may levy fund management charge during the settlement period and no other charges can be levied. Partial withdrawals and switches shall not be allowed during the settlement period and complete withdrawal may be allowed at any time during the settlement period without levying any charge.
“This one-time 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 risks of continued fluctuation of fund value-based on daily net asset value and clear consent has to be obtained from the policyholder. This is allowed for unit-linked policies maturing up to May 31, 2020,” said the regulator.