No more extension of premium-deferment scheme, but insurance industry will still help

THE window for insurance policyholders to defer their premium payments amid the pandemic, under a scheme by the insurance industry, will close on March 31 as slated, after a previous extension.

But life insurers "remain ever ready" to provide company-specific assistance even after the deadline, said Khor Hock Seng, president of the Life Insurance Association Singapore, Singapore (LIA Singapore), on Monday. "Our priority remains to ensure that policyholders are protected over the long term."

The Deferred Premium Payment (DPP) scheme was launched in April last year, allowing policyholders whose premium due date or policy renewal date fell on or between April 1, 2020, and Sept 30, 2020 to defer paying premiums by up to six months. The window was later extended to March 31, 2021.

Policyholders currently on the scheme will continue to benefit from it until their applicable end date. If they continue to face financial difficulties and remain unable to pay the deferred premiums in full at the end of the deferment period, they may approach their insurers for assistance, said LIA Singapore.

Options may include an extension of the policyholder's DPP by three months or a three-month instalment payment plan.

About 41,000 applications were received in 2020 since the launch of the scheme in April last year. They account for about 0.3 per cent of total in-force policies as at March 31, 2020.

Even so, the association noted that take-up rates for the scheme have declined since the launch of the scheme. In the second quarter of 2020, 29,000 applications were received, and this figure fell to about 6,000 in the fourth quarter of of the year.

Applications for the scheme have continued to fall in the first two months of 2021, the association added.

There has also been a "low" number of applications for help from policyholders who remained unable to pay the deferred premiums in full at the end of the grace period.

Since Oct 1, 2020, there were about 5,900 such applications, which meant that only three in 10 policies on DPP sought additional assistance after their DPP expired. And, the number of such applications has also decreased each month since Oct 1, 2020, the association noted.

Ong Chong Tee, deputy managing director (financial supervision) at the Monetary Authority of Singapore (MAS), said LIA Singapore's 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," he added.

Prudential Singapore chief executive Dennis Tan said that the insurer will continue to provide the "necessary support" to customers who may still need help with paying their premiums, including extending the deferred payment option on a case-by-case basis.