Surrendering your insurance plans during Covid-19? Here’s how you can tighten your budget while still being protected.
The Covid-19 pandemic has greatly affected all of us, in more ways than one. Many of us are tightening our purse strings and sieving out expenses that we no longer deem necessary. More often than not, the first thing to go on our list would be our insurance policies.
But, did you know that there is a way around this? Here are 3 ways to still be protected even with a tight budget.
During tough times like this, the AIA Covid-19 Support Programme would be a great relief for some. The programme will extend the grace period for payment of premiums due up to 180 calendar days for customers who are financially affected by COVID-19.
With premium payments being deferred for the duration of the Extended Grace Period, there will be:
No interest charged on deferred premiums for the duration of the Extended Grace Period.
Flexible payment options for deferred premiums, including pay in installments or apply to extend the Extended Grace Period by another 180 days.
A choice to make payments in multiples of the regular premium amount.
Apply for the extension of grace period in 2 simple steps!
Step 1: Check if you are eligible for support
Your policy must be an individual life and/or health insurance plan. (Not applicable to Universal Life and Platinum Heritage plans.)
Your policy renewal or premium due date is between 1 April 2020 and 31 March 2021.
Step 2: Submit your application here, and the result of your application will be notified to you within 5 working days.
At the end of the Extended Grace Period, there are several options you can choose from.
Option 1: Pay all outstanding premiums in a lump sum before the end of your EGP.
Option 2: Pay in installments by applying here
Option 3: Apply to extend EGP for another 6 months.
Do pay in full all the deferred premiums via AIA Pay EZ, AXS or Internet Banking before the new Extended Extended Grace Period expiry date.
Option 4: Select a non-forfeiture option. No application is required as this will be applied onto your policy at the end of your EGP.
Policies with surrender value: Automatic Premium Loan, Reduced Paid-Up Insurance, or Extended Term Insurance
Policies without surrender value: Non-forfeiture option not available, policy will lapse without value.
Investment Linked Policies: Premium Holiday will be effected if there is sufficient value to pay for applicable fees and charges.
With the variety of options provided by AIA, you no longer have to worry about your premiums piling up during this difficult period.
Investment Linked Plans with AIA gives you the flexibility to vary your level of insurance coverage and allow premium holidays, during which premium payments can be temporarily stopped without having to terminate your plan.
Alternatively, auto premium loans (APL) can ensure the continuity of your coverage, even when premiums are not paid. The APL borrows the outstanding modal premium amount from the policy cash value to pay for premium due and an interest is charged at 8% per annum. As a result of the APL, cash values and bonuses will still continue to accrue under the policy, hence allowing your returns to remain unaffected.
Should you be hesitant to take up a premium holiday or an auto premium loan due to the charges incurred, check out the Smart Flexi Rewards Savings Plan! It is a savings plan that puts your needs first, prioritising flexibility so you can reach your financial goals, with ease. The best thing is, you will receive a guaranteed yearly coupon that you can withdraw every year in times of need like these, or accumulate them to fulfil your longer term goals.
Financial advisors play a vital role in helping you understand and sieve out ways in which you can protect, grow and maximise your wealth. A well thought-out financial plan will ensure that the financial services you opt for works for you and your wealth objectives are met in good times and bad.
Feel free to contact your financial advisor to conduct a holistic review of your insurance and investment portfolio. With professional financial advice on the available policy options, you can adjust your insurance coverage and premiums to sustainable levels that best fit your evolving needs.
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