If you can’t pay your Life Cover policy, Advice First Ireland are here to help
Some useful information on the life insurance premium skip for these difficult times when you may be struggling to meet payments
These are very unsettling times for all of us. This pandemic is far reaching on a never before seen basis and this has affected people’s ability to pay their Life Insurance and Mortgage Protection policies.
We have been working hard with our customers and friends that need a little help with their paying their policies over this stressful time.
Thankfully we can offer help, most of the Life Insurance companies have stepped up to the mark with a premium skip option.
This is the current life insurance premium skip position with the life companies, it may change with some providers based on the recent extension to the mortgage repayment skip up to 6 months.
Royal London – All Protection Policies
Life Insurance Premium Skip Ireland
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 €50 per month.
2. You defer payment (no payment made) for the next 3 months (3 x €50 = €150 in total).
3. At the end of the three months, Royal London will increase your premium by €12.50 per month for 12 months (€150 / 12).
4. Your premium will, therefore, be €62.50 per month for the 12 months following the deferred period.
5. Your premium will go back to €50 per month after the 12 months has ended.
Royal London will pay any claim during the premium deferral period assuming you pay the arrears.
To set-up a premium deferral period, all Royal London need is a written instruction. You can send the direction or we can look after this for you. In the case of a joint life or dual life policy, it would be helpful if both parties can sign the written instruction.
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
Life Insurance Premium Skip (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 €50 per month.
2. You defer payment (no payment made) for the next 4 months (4 x €50 = €200 in total).
3. At the end of the four months, Aviva will increase your premium by €16.67 per month for 12 months (€200 / 12).
4. Your premium will, therefore, be €66.67 per month for the 12 months following the deferred period.
5. Your premium will go back to €50 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 repayment 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. So, the mortgage lender has ownership of the policy for the 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 [email protected]
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 be warned DURING THESE 60 DAYS YOU ARE NOT ON COVER.
Life Insurance Premium Skip Ireland
Zurich Life
Zurich Life has not introduced any COVID19 specific measures or premium skip options, but they have always had a three-month reinstatement clause.
You can stop paying your premiums for up to 3 months. When a customer comes to reinstate their policy, they will now have two options – either to pay all outstanding premiums at once – or spread the payments out over the next 12 months. The customer can inform us of which option they are taking by filling out a simple form
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 Cancer Cover or Permanent Total Disablement (Own Occupation).
As with Royal London above, DO NOT CANCEL YOUR POLICY, cancel the direct debit instead.
It’s important to note that as per Zurich’s policy conditions, a customer’s policy cannot be reinstated if Zurich Life receives a request from the customer to cancel their policy.
Irish Life
Clients experiencing financial difficulties will be offered the option of a three month break from premium payments while maintaining their cover and benefits in full. Clients who take up the offer may not be able to immediately repay the premiums owed at the end of the three-month period. To help ease the burden for those clients, they can choose one of two options to pay back the premiums owed:
- Option A: repay over the following twelve months, meaning the monthly payment will increase by 25% for 12 months. At the end of the 12 month period the premium returns to normal. There is no additional charge for this option.
- Option B: repay over a 60 month period, meaning the monthly payment will increase by 5.5% for 60 months. At the end of the 60-month period, the premium will return to its normal level. Clients will agree to pay back the premiums owed plus 10%. This small charge is required to help manage the cost of the offer. It isn’t an interest rate charge, but is equivalent to an interest rate of 3.75%.
If you are experiencing financial difficulties caused by COVID–19 and you are struggling to pay your premiums, please get in touch with us, even if you’re not a client of ours we will do all we can to help.
We also recognise that your specific circumstances are different to everyone else’s in these changed times. We are experienced in helping people to manage their money better and to make the most of their financial resource. As Financial Advisors, we are always willing and happy to have a chat with you about your situation – whether that’s in relation to specific action you need to take or whether you just want a wise second opinion in relation to your personal finances. Feel free to give us a call.
Let’s all stay healthy.
Any questions or need advice on the Life Insurance Premium Skip
If you have any questions or need advice, please feel free to give us a call on 074 910 3938 or Email us
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