The Life Insurance Association (LIA) of Singapore is working out several measures to help cash-strapped customers who might otherwise forfeit their insurance policies because of inability to pay their insurance premiums in the current financial crisis, according to Singapore media reports.
One relief plan is to allow holders of whole life and endowment policies pay a part of the premium just for protection so that they would continue to enjoy coverage against death, critical illnesses or permanent disability while deferring the non-protection portion of their policies. Another plan is for a premium holiday in which premium payments are suspended temporarily.
These efforts follow news of an increase in the number of policyholders giving up their policies in the fourth quarter of last year. Forfeitures increased to 2.84% from 2.73% in the third quarter. LIA figures also show that the policy surrender rate increased to 2.19% in the fourth quarter from 1.9% in the corresponding period of 2007, as more policyholders cashed in their policies.
The data reveal too that Singaporeans are deferring purchasing new life insurance policies. Annual premium sales were S$228.8 million (US$153 million), while single premium sales totalled S$811 million in the October-December quarter. The figures represented a drop of 16% and 69% respectively over the same quarter in 2007.
Sources say that new rules which took effect last April on investing money from the Central Provident Fund, a mandatory provident scheme, also contributed to the decrease. The rules reduced the sum available for private investments, including insurance.
One relief plan is to allow holders of whole life and endowment policies pay a part of the premium just for protection so that they would continue to enjoy coverage against death, critical illnesses or permanent disability while deferring the non-protection portion of their policies. Another plan is for a premium holiday in which premium payments are suspended temporarily.
These efforts follow news of an increase in the number of policyholders giving up their policies in the fourth quarter of last year. Forfeitures increased to 2.84% from 2.73% in the third quarter. LIA figures also show that the policy surrender rate increased to 2.19% in the fourth quarter from 1.9% in the corresponding period of 2007, as more policyholders cashed in their policies.
The data reveal too that Singaporeans are deferring purchasing new life insurance policies. Annual premium sales were S$228.8 million (US$153 million), while single premium sales totalled S$811 million in the October-December quarter. The figures represented a drop of 16% and 69% respectively over the same quarter in 2007.
Sources say that new rules which took effect last April on investing money from the Central Provident Fund, a mandatory provident scheme, also contributed to the decrease. The rules reduced the sum available for private investments, including insurance.
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