6 solutions to maintain your insurance policy during the pandemic.
(Baonghean.vn) - Life insurance is considered a "financial vaccine" when the pandemic becomes unpredictable and poses many risks to human health. Although understanding this, many customers still struggle to find solutions to maintain their insurance contracts when facing multiple financial pressures simultaneously. Below are some solutions recommended by experts to protect your insurance benefits.
Take advantage of the fee payment extension.
The premium payment extension period is approximately 60 days from the contract's due date. During this period, even if the premium has not yet been paid, the contract remains in effect with full insurance benefits.
To share the financial burden with customers, some insurance companies have proactively offered 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 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 arrange your finances while still maintaining full protection. However, you should proactively mark your calendar or record the last day of the grace period to avoid forgetting to pay your premium.
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| Prudential has increased the premium payment grace period to up to 120 days. |
Use the refund value to pay fees automatically.
For traditional insurance products with a surrender value sufficient to cover a contract premium or a smaller premium, if the customer fails to pay the premium after the premium payment extension period, the insurance company will automatically advance an amount from the surrender value to cover the premium.
This is a common practice in the insurance industry, based on the principle of prioritizing the customer's right to protection. However, it's important to note that to ensure fairness among customers, automatic premium advances will result in a reduction in investment income (understood as interest). Therefore, when financially able, customers should promptly arrange to repay both the premium and the reduced investment income.
Use the option to temporarily suspend payment.
For investment-linked insurance products, if the contract is in its sixth year or later, you can exercise your right to temporarily suspend premium payments. However, if the insurance contract includes any supplementary products, remember to pay the premiums for these products to maintain your insurance benefits.
If the contract has not yet reached 5 years, depending on the specifics of the insurance product, you may request to withdraw additional investment account value, or the company may use the account value to pay premiums for the contract or for accompanying supplementary products if agreed upon.
When your finances improve, you can make additional investments (“top up”) to increase the value of your account for profitable investments, generating returns.
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Use a bank credit card.
To take advantage of the "pay now, spend later" option, you should use your bank credit card to pay your insurance premiums. You can repay 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.
Furthermore, when using a credit card to pay insurance premiums, you can also enjoy attractive cashback policies for cardholders. Of course, only certain card types apply this policy, so users should check specifically whether this offer applies to their card. For example, the VPLady card issued by VPBank offers cashback of up to 6% for online insurance payments, with a maximum limit of VND 600,000 per month.
Changes to the fee payment schedule
Paying premiums annually is often preferred by buyers because it has the lowest total cost compared to other payment methods, and it also helps buyers avoid having to remember or forget to pay.
If unable to raise a large sum of money to pay the insurance premiums, the policyholder can request the insurance company to change the payment frequency from annual to semi-annual, quarterly, or monthly. The amount due will be reduced accordingly, easing the financial burden on the policyholder. It's worth noting that this request can only be made on the policy's anniversary date.
Maintain the contract with a reduced sum insured.
After considering all the above solutions and still not finding one that suits them, the buyer may consider maintaining the insurance policy with a reduced amount. This solution will allow the buyer to maintain protection at a lower insured value and will not have to continue paying premiums.
However, the solution of maintaining the contract with a reduced amount will not apply to all insurance policies. Depending on the specific circumstances of each contract, the insurance company will calculate and determine whether this option is feasible.
Unlike the solutions above, maintaining a contract with a reduced sum insured should be considered a "last resort" when your financial difficulties are determined to be long-term and unlikely to recover in the future.
If you are still wondering "which solution is best suited for my contract?", you should directly discuss and consult with an insurance advisor or company for specific support and the most accurate answer.
Ultimately, insurance is a way to cultivate disciplined saving habits. You shouldn't lose your insurance benefits or disrupt your carefully constructed financial plan because of temporary difficulties. Remember that insurance isn't available to everyone at any time; it's only available when you don't need or require it.
