(Source:Deferment of premium payments during Covid-19: Insurance firms must buck up By EE TECK SIEW)
In response to this article from TodayOnline.com, I had sent the following to them, MAS & LIA. I hope COVID-19 situation improves and this scheme will be a white elephant but at the meantime, hope the process can be improved.
It is a good initiative by MAS and respective insurance companies to defer the insurance premiums for the policy holders who are financially affected by COVID-19. However, many policy holders faced difficulties when it comes to the application and process of this brilliant idea. The most common feedback I get from my clients and public are:
1) Non-standard process and documents required by different insurers.
Most of these applicants have faced financial difficulties and they have more urgent matters to handle for e.g. finding another job or a second job to replace the income lost. Looking for the documents to be submitted could be the last thing in their mind. While there must be checks to ensure there is no abuse of this scheme, the current process is more of a deterrent than an assistance.
What made things worse is if the policy holder is a self-employed person. On top of their IRAS statements, they may have to show their bank statement which I see no relevance to this application. A sufficient balance in a person bank account does not reflect the expenses. There is also nothing wrong if the person wish to defer the premium so that he can have more buffer if the situation turn worse.
Instead of different documents that is needed, all insurers can standardise to use Resilience Budget as a citeria. May it be the SIRS, TRF or any other grant, the policy holder should qualify as long as the policy holder can show he is eligible for any of the above. Afterall, the checks were already done at the respective government bodies. This also reduce the workload on the insurer’s end which I believe majority are facing manpower shortage due to WFH.
2)The lump sum required to be paid at the end of deferred premium.
Simply put it, if one cannot pay $100 per mth for 6 months, what is the chance he can pay $600 in one lump sum 6 months later? Even if he managed to find a job or financial situation gets better, he needs to clear the outstanding bills accumulated over the last 6 months.
Instead of paying the monthly premium in one lump sum, allow the policy holders to pay by installment for the remaining months or up till police anniversary date.
In the situation cited above, the policy holder may have to pay e.g $200 per month for the next 6 months. It can be administratively difficult for the insurers so allow the extra premiums to be paid via cash or AXS etc instead of the usual GIRO set up.
These may not be the best ideas but I believe as an industry, we can do better to assist the clients to tide over this challenging time.