6 solutions to maintain insurance contracts during the epidemic

Take advantage of the fee payment extension

The grace period is a period of 60 days from the due date of the contract premium. During this period, although the contract may not have been paid, it remains in effect with full insurance benefits.

To share the financial burden with customers, some insurance companies have proactively proposed solutions to extend this period. For example, Prudential Insurance Company has adjusted the premium payment extension period to 120 days for all valid insurance contracts with premium payment due dates from August 30, 2021 to December 31, 2021.

If you are a Prudential customer, you can take advantage of the 120-day grace period to get your finances in order while still maintaining your protection. However, you should proactively mark your calendar or take note of the last day of the grace period to avoid forgetting to pay your premium.

Prudential extends premium payment grace period up to 120 days.

Use automatic premium refund value

For traditional insurance products with a surrender value sufficient to pay one contract premium or a smaller premium, if after the grace period the customer has not paid the premium, the Insurance Company will automatically advance an amount from the surrender value to pay the premium for the contract.

This is a common practice in the insurance industry, based on the principle of putting the customer's right to protection first. Just note that to create fairness between customers, automatic advance fees will generate a reduction in investment income (understood as interest). Therefore, when having enough finance, customers should quickly arrange to repay both the fee and the reduction in investment income.

Use the right to suspend payment of fees

For investment-linked insurance products, if the contract is from the 6th year onwards, you can use the right to temporarily suspend premium payment. However, if the insurance contract includes some additional products, do not forget to pay the premium for these products to maintain insurance benefits.

If the contract has not been signed for 5 years, depending on the specifics of the insurance product, you can request to withdraw additional investment account value or the company will use the account value to pay for the contract or for additional products if agreed upon conditions.

When your finances improve, you can invest more (“top up”) to increase the value of your account to invest profitably and bring in profits.

Use bank credit card

Take advantage of the “use now, pay later” advantage, you should use a bank credit card to pay the insurance premium. You can refund all or part of the amount advanced by the bank, up to 45 to 55 days after the transaction, depending on the policy of the card issuing bank.

Not only that, when using a credit card to pay insurance premiums, you can also enjoy an attractive refund policy for cardholders. Of course, only some types of cards apply this policy, users should find out specifically whether this preferential policy applies to the card they own or not. For example, the VPLady card issued by VPBank is applying a refund policy of up to 6% for online insurance payments, and not exceeding a maximum of 600,000 VND/month.

Change fee payment schedule

Paying fees annually is often chosen by buyers because it has the smallest total fee compared to other payment schedules, and it also helps buyers avoid having to remember too much or forget to pay fees.

If the buyer cannot manage to pay a large amount of money for the insurance premium, he can send a request to the Insurance Company to change the payment period from year to half-yearly, quarterly or monthly. The amount to be paid will be reduced accordingly and no longer be a pressure for the buyer. A small note is that this request can only be made on the anniversary of the year of the contract.

Maintain contract with reduced insurance amount

After considering all of the above solutions and still not finding a suitable solution, the buyer can consider the option of maintaining the insurance contract at a reduced amount. This solution will help the buyer maintain the protection at a lower insurance value and will not have to continue to pay the premium.

However, the solution of maintaining the contract with a reduced amount will not apply to all insurance contracts. Depending on the specific situation of each contract, the insurance company will calculate and determine whether this option can be implemented or not.

Unlike the above solutions, maintaining a contract with a reduced insurance amount should be considered a “last resort” when your financial difficulties are determined to be long-term and unlikely to recover in the future.

At this point, if you are still wondering “which solution is most suitable for my contract?”, you should directly discuss and consult with a consultant or insurance company to get specific support and the most accurate answer.

Finally, insurance is a way to practice disciplined savings, do not lose insurance benefits because of temporary difficulties, as well as break the financial plan that you have worked hard to build. Remember that not at any time, anyone can buy insurance, insurance can only be bought when you do not have to use or do not need it.