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Extending a helping hand to people facing cash crunch, regulator Irdai has asked life insurance companies to provide an additional window of 30 days to policy holders for paying premium.
Following withdrawal of legal tender character of old Rs 500 and Rs 1,000 denomination notes from November 9, government has put restrictions on cash withdrawals from banks and ATMs. Currently, a person can withdraw up to Rs 24,000 in a week.
Amid the cash crunch, Life Insurance Council had approached the Insurance Regulatory and Development Authority of India (Irdai) to extend grace period by an additional 30 days for all the policies falling due between November 8 and December 31, 2016.
After examining the representation and keeping in view the inconvenience to policyholders, Irdai has allowed "the extension of grace period by an additional 30 days for all the policies issued by life insurers the premium/s of which fell/falls due on or after November 8, 2016 till December 31, 2016".
The regulator said that the special one-off dispensation is given so that policyholders do not suffer from non-payment of due premiums due to recent cash crunch.
"All life insurers are advised to comply," said the Irdai circular addressed to CEOs of the Life Insurance Companies.
This follows a move by the Reserve Bank to provide additional 60 days for repayment of housing, car, farm and other loans worth up to Rs 1 crore. This is applicable to loans payable between November 1 and December 31, RBI said in a notification.
