Insurance regulators have granted a 3-month premium pay holiday to all insurance holders facing financial strains during this coronavirus pandemic.
Insurance Regulatory Authority (IRA) announced that insurers will be needed to allow a delay of payment and should also consider other offers. “Insurers should avail policyholders a three-month grace period. The grace may be over and above any contractual premium holidays already in place for existing policies,” said the chief executive of IRA.
The life policy insurance holders have a month grace period, and the extra time offered by the insurance regulator will be of good help to most clients who are going through a tough time due to disruption caused by coronavirus.
However, according to some industries, a holiday would be problematic to apply in the general insurance segment that includes fire, personal accident, motor, theft, liability, workman’s compensation, aviation, marine, and engineering. This is because such a holiday will make insurers settle all claims even if the insurance holder do not have any paid premiums.
Insurance does not work when everyone is experiencing a similar risk that is why insurance firms have exempted their policies from covering the pandemic.