What are the consequences if you miss a Premium for your Protection policy?

What are the consequences if you miss a Premium for your Protection policy?

In these unprecedented times we are all being advised to ‘manage our cashflow’ and cut back on unnecessary expenditure in order to get through this crisis. Some queries we have received in recent weeks relates to the consequences of not paying your monthly life assurance or serious illness premiums.

Life insurance companies recognise that these times call for additional flexibility for their policyholders. Most life insurance companies have a ‘reinstatement’ option built into their Protection Policies. This allows the policyholder or their legal representative pay the unpaid premiums due on their policy within a specific date on which the first unpaid premium was due and have the policy reinstated. The timeframe from the unpaid premium varies from one Life Company to another.

In recent weeks, a number of Life companies have clarified their position regarding the flexibility they are giving their clients based on the Covid19 difficulties and we have summaries some of these changes below.

Irish Life

The policy holder has the right to pay the unpaid premiums due on their policy within 6 months of the date on which the first unpaid premium was due and have the policy reinstated. The policy can be reinstated even if a claim has arisen. The provision does not apply if the policy is cancelled by the policy holder, and bear in mind a Declaration of Health is required after 90 days.

Royal London

Royal London are providing a 3-month premium deferral option during the current crisis. During this 3-month period, no premiums will be payable, but cover will continue to be in place. At the end of the premium deferral period, the premium arrears due can be repaid at that point or spread out over the upcoming 12-month period. You can choose the option that suits you best. Any claim during the premium deferral period will be paid, in line with their usual claims philosophy and assuming the premiums due are repaid.

Zurich

The policy holder has the right to pay the unpaid premiums due on their policy within 6 months of the date on which the first unpaid premium was due and have the policy reinstated. The policy can be reinstated even if a claim has arisen. The provision does not apply if the policy is cancelled by the policy holder, and bear in mind a Declaration of Health is required after 90 days.

New Ireland

The policy holder has the right to pay the unpaid premiums due on their policy within 12 months of the date on which the first unpaid premium was due and have the policy reinstated. The policy can be reinstated even if a claim has arisen. The provision does not apply if the policy is cancelled by the policy holder, and bear in mind a Declaration of Health is required after 90 days.

Separate to this, New Ireland are offering a 3 month Mortgage Protection premium waiver to customers who have been granted a payment break on their mortgage. The 3 months premiums will not be required to be repaid at a later date.

Aviva

The policy holder has the right to pay the unpaid premiums due on their policy within 6 months of the date on which the first unpaid premium was due and have the policy reinstated provided that you inform Aviva in writing and provide Aviva with such medical and other evidence of good health, and pay all outstanding premiums within the 6 months.

We know that some life insurers are now not offering insurance to those who have been diagnosed with Covid19 or those who are currently self isolating. Therefore, we would encourage you not to rush to cancel your personal protection plans as getting cover in the future, may be a lot more difficult. There may be a other direct debits or deductions from your accounts that could be reviewed in order to save some money in the short term.

If Eolas Money can assist you with any of your personal protection planning, or you would like some guidance on the plans you currently have, don’t hesitate to contact us and we will be happy to help. queries@eolasmoney.ie