COVID-19 Payment Breaks on Insurance Policies

These are unsettling and challenging times, with widespread financial impacts on people who may have lost their jobs or experienced a significant reduction in income.

I’m proud to say that, unlike some other parts of the insurance industry, Ireland’s main life insurance providers want to work with you if you are in this situation to find a suitable solution.

In this article, I look at the help on offer from each provider:

Royal London – All Protection Policies

a) 3-Month Premium Deferral Option

During these three months, no premiums will be payable, but cover will continue to be in place.

At the end of the premium deferral period, you can repay the premium arrears either a) at that point or b) spread out over the upcoming 12-month period. You can choose the option that best suits.

Here’s an example of how it will work if you spread the repayment of the arrears over 12 months:

1. Your regular payment is €60 per month.
2. You defer payment (no payment made) for the next 3 months (3 x €60 = €180 in total).
3. At the end of the three months, Royal London will increase your premium by €15 per month for 12 months (€180 / 12).
4. Your premium will, therefore, be €75 per month for the 12 months following the deferred period.
5. Your premium will go back to €60 per month after the 12 months has ended.

Royal London will pay any claim during the premium deferral period assuming pay the arrears.

To set-up a premium deferral period, all Royal London need is a written instruction. You or your broker can send the direction. In the case of a joint life or dual life policy, it would be helpful if both parties can sign the written instruction.

b) 100-day Reinstatement Period

Reinstatement allows you to stop making payments for up to 100 days.

Once you pay the arrears, Royal London will put your policy back in force automatically, without asking any health questions.

To avail of this option, simply cancel your direct debit but DO NOT CANCEL your policy in writing. If you cancel your plan, you cannot reinstate (a fancy way of saying put your policy back in place).

Aviva Life – All Protection Policies

Protection Payment Deferral for Four Months

If you are concerned about paying your monthly protection premium, Aviva may be able to offer you a payment deferral of four months.

During the payment deferral period, Aviva would continue to offer full cover as usual.

At the end of the payment deferral period, Aviva will adjust your premium upwards so that you make ‘Deferral’ repayments over the following 12-month period.

Example:

1. Your regular payment is €60 per month.
2. You defer payment (no payment made) for the next 4 months (4 x €60 = €240 in total).
3. At the end of the four months, Aviva will increase your premium by €20 per month for 12 months (€240 / 12).
4. Your premium will, therefore, be €80 per month for the 12 months following the deferred period.
5. Your premium will go back to €60 per month after the 12 months has ended.

You can apply for the payment break by completing this application form.

Terms and Conditions apply, here are some of them:

• If you cancel your policy during the 12 months immediately following the end of the agreed deferred period, you must quickly pay all unpaid premiums relating to your 4-month deferred period.
• You must declare that the COVID-19 pandemic has severely impacted your income, given the nature of your employment.
• Protection Payment Deferral is subject to approval by Aviva and continuous review. Policies must have been live and in force before the 31st of March 2020

New Ireland Assurance

Assigned Policies only

New Ireland is offering a three-month Mortgage Protection premium waiver to customers who have a payment break on their mortgage. You don’t have to repay the three month premiums.

Terms and Conditions apply, here are some of them:

• The protection policy must be assigned to a mortgage.
• Evidence of receiving a break on your mortgage repayments from their bank will be required
• The policy must be in force before the pandemic starting in
  Ireland. e.g. before the 01st of March 2020
• Monthly direct debit policies only (not annual payment)

How to apply:

Send an instruction signed by each policyholder and evidence of approval of the mortgage payment break to existingbusiness@newireland.ie
The request must reference the New Ireland policy number and should be received in New Ireland no later than ten working days before the next premium due date.

What about Non-Assigned protection policies?

New Ireland customers have 30 days of grace where they remain covered after their payment due date.

After this period, you have 60 days to reinstate their policy, but…

DURING THESE 60 DAYS YOU ARE NOT ON COVER.

Zurich Life

Zurich Life has not introduced any COVID19 specific measures, but they have always had a three-month reinstatement clause.

You can stop paying your premiums for up to 3 months, but you have to pay the full arrears within the three months to prevent the cancellation of your policy.

Your policy can be reinstated even if a claim has arisen for a Life Cover (Lump Sum), Life Cover (Monthly Income), Terminal Illness, Serious Illness, Cancer Cover, Angioplasty, Partial Payment Serious Illness, Partial Payment CancerCover or Permanent Total Disablement (Own Occupation).

As with Royal London above, DO NOT CANCEL YOUR POLICY, cancel the direct debit instead.

Irish Life

Nothing COVID19 specific but similar to Zurich Life above, they have a three-month reinstatement policy.

Over to you

If you are experiencing financial difficulties caused by COVID–19 and you’re struggling to pay your policy premiums, please get in touch with me (nick at lion dot ie) even if you’re not a client of ours.

I’ll do all I can to help.

Keep safe.

Nick