Demonetisation impact: Insurers ask IRDAI to extend policy renewal grace period to Dec 30

MUMBAI: Life insurance companies have asked the regulator to extend the grace period to renew policies in the wake of demonetisation of high-denomination notes, which had inconvenienced the public.

State-owned Life Insurance Corporation of India (LIC) has added 22 days to the grace period given to policyholders, waiving the penal charges for the delay in payment and doing away with medical examinations. Payment of premium due during the grace period ending between November 9 and 30 can still be made before the end of this month without attracting penal interest. Submission of a declaration of good health on account of the delay in renewal premium has also been waived for this period.

The industry wants the Insurance Regulatory and Development Authority of India (IRDAI) to extend the grace period to December 30 for all life insurance products due for renewal now. This would ease the burden of policyholders who have to pay the renewal premium amid a cash crunch and long queues at banks and post offices for getting new high-denomination notes.


The grace period for payment of premium on life insurance policies ranges from 15 to 30 days, depending on whether the frequency is quarterly, half-yearly or yearly.

About 60% of insurance policy sales takes place in the second half of the financial year. Those who pay cash may delay their purchases due to the ban.