SINGAPORE – An industry-wide scheme to help insurance policyholders defer their premium payments amid the coronavirus pandemic will taper off as applications close on March 31, said the Life Insurance Association, Singapore on Monday (March 8).
The Deferred Premium Payment scheme saw about 41,000 applications last year since its launch. This accounted for about 0.3 per cent of total in-force policies as of March 31 last year.
There was a notable slide in take-up rates following the second quarter of last year, when the bulk of new applications – 29,000 – were received, which continued through the first two months of this year. The number of applications fell to around 6,000 from October to December.
The majority of applications were accepted, which helped alleviate financial pressure for many policyholders, said the association’s president, Mr Khor Hock Seng.
The number of policyholders who remain unable to pay the deferred premiums in full at the end of their deferment period has been low, going by the applications for assistance received, the association noted.
Since Oct 1, there were about 5,900 such applications, which means that only three in 10 policies on the scheme sought additional assistance after the deferment expired.
The number of such applications has also steadily decreased each month since that time, the association said, without giving figures.
It said the insurance industry will continue to support policyholders who are financially impacted by Covid-19 and are unable to pay their premiums after March 31, 2021.
Those currently on the premium payment deferment scheme will continue to benefit from it until their applicable end date.
Policyholders who still face financial difficulties and cannot pay the deferred premiums in full at the end of the deferment period may approach their insurers for assistance, the association said.
In such cases, they may be offered an extension of the scheme by three months, or a three-month instalment payment plan.
“After March 31, life insurers remain ever ready to provide company-specific assistance, and our priority remains to ensure that policyholders are protected over the long-term,” said Mr Khor.
Prudential Singapore chief executive Dennis Tan said the firm may extend the deferment scheme on a case-by-case basis for customers still facing financial hardship and requiring assistance in paying their premiums.
“As much as possible, we want to help our customers keep their coverage because insurance is for the long term,” he said.
Mr Ong Chong Tee, the Monetary Authority of Singapore’s deputy managing director for financial supervision, said: “(The) year-long, industry-wide deferred premium payment scheme has provided helpful relief to policyholders who encountered cash-flow difficulties due to the Covid-19 pandemic.
“MAS is pleased to note that even as the industry-wide measure tapers off, many life insurers have committed to continue providing support to their policyholders who continue to face financial challenges.”
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