Insurance: Scheme to defer payment of premiums tapering off

An industrywide scheme to help insurance policyholders defer their premium payments amid the coronavirus pandemic will taper off, and applications close on March 31, said the Life Insurance Association Singapore yesterday.

The Deferred Premium Payment scheme saw about 41,000 applications last year. This accounted for about 0.3 per cent of the total number of policies in force as at March 31 last year.

The bulk of new applications - 29,000 - were received during the second quarter of last year. After that, there was a notable slide in take-up rates, and this continued through the first two months of this year.

The number of applications fell to around 6,000 from October to December last year.

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 number of applications for assistance that have been received, the association noted.

Since Oct 1 last year, there were about 5,900 such applications, which means that holders of only three in 10 policies on the scheme sought additional assistance after their 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 affected by Covid-19 and are unable to pay their premiums after the end of this month.

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.

Number of applications under the Deferred Premium Payment scheme last year, accounting for about 0.3 per cent of total policies in force as at March 31, 2020.

Proportion of policies on the scheme whose holders sought additional assistance after the deferment expired.

"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 company 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.

NTUC Income said it will be extending the application period for its income support schemes from April 1 to Dec 31, to help customers cope with the impact of the pandemic.

This means eligible customers holding life and health insurance plans can apply for premium deferments, premium assistance or even temporary basic protection plans till the end of the year.

Since the launch of the support schemes, NTUC Income said it has provided more than $1.4 million worth of support and helped more than 20,000 individuals and businesses.

Mr Ong Chong Tee, the Monetary Authority of Singapore's deputy managing director for financial supervision, said: "(The) year-long, industrywide 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 industrywide measure tapers off, many life insurers have committed to continue providing support to their policyholders who continue to face financial challenges."