Complete Guide on Deferment of Insurance Premium Payment

Do you have one or more life insurance policy/ family takaful certificate?

Do you have one or more general insurance policy/ general takaful certificate?

If your answer is YES to either question. Then, please read on...

As announced during the "Prihatin Economic Stimulus Package" by our prime minister on 27 March 2020, family takaful and insurance companies will offer a 3-month suspension on premiums by contributors whose source of income is affected by the pandemic.

Is it Automatic?

NO. Affected policyholders have to seek approval from their respective insurance companies.

Who are eligible?

The option to defer the payment of life insurance premiums/ family takaful contributions is only available for “affected policyholders/ takaful participants”.

“Affected policyholders/ takaful participants” are

(a) Individuals who have been infected by COVID-19, subject to mandatory home quarantine due to contact with a COVID-19 patient or those who have suffered a loss of income as a result of the COVID-19 situation; and

(b) SMEs which have suffered a loss of income as a result of the COVID-19 situation.

Examples of events or definition of loss of income:

(i) For individuals: retrenchment, shorter working hours, no pay leave and salary or commission cuts; and

(ii) For self-employed and SMEs: loss of business income

https://www.allianz.com.my/deferment-covid19

https://www.hla.com.my/CMS/HLA360/Others/HLA-deferment-EN-BM-CN(final)-(1).aspx

When can I apply for this deferment of premium?

You can apply to “opt-in” this 3-month premium deferment from 1 April 2020 until 31 December 2020. This is applicable for all life insurance premiums/ family takaful contributions that fall due from 18 March 2020 to 31 December 2020. Most companies accept applications via email.

Can I apply for more / lesser than 3 months of deferment?

No. You can either apply for 3 months or don't apply. It was fixed at 3 months.

Will I need to provide evidence/ proof that I am an affected policyholder/ takaful participant?

Yes. Please submit any of the relevant documents below during application:

• Doctor’s Letter confirming Covid-19 infection (if policy/certificate holder is infected), or
• Employer’s Letter of Salary Reduction/Termination Letter, or
• Letter of Closure of non-essential businesses by Business Owners, or
• Other relevant proof or documents, if any (for example: hawker center closure notice)

https://www.prudential.com.my/en/our-company/general-info/deferment-of-premium-payment/

https://www.aia.com.my/en/help-support/important-announcements/deferment-premium-contribution-payment.html

What happens after the 3-month premium deferment period?

You are required to repay all the outstanding premiums/ contributions deferred. 

Is this premium deferment applicable to general insurance premiums?

NO. Please contact your general insurance companies to discuss the options available.

According to financial planner Alex Yeoh, different life insurers may have different terms and conditions for the grace period. Particularly for investment-link plans, although your policy will stay in-force during the 3-month premium deferment, the cost of insurance may still be charged and this may impact the sustainability of your protection coverage over the long-term period.

So, it's advisable to continue paying for the insurance premium, if you can. Moreover, insurance should be the last thing in your mind to stop during financial difficulties. Because you need insurance the most during this period, other than putting enough food on the table. You can't afford to fall sick. You can't afford to fall down. You can't afford to burden your family now.

Remember: This is NOT a waiver of premium. You have to pay it back after the 3 months period.

Source: Bank Negara Malaysia FAQ

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