Dear All Experts,
One of the leading Insurance company is auto surrendering policies after completion of lock in period for non payment of one premium, where five premiums are paid and lock in period of five years is already completed. There are two similar instances, one is five year old policy wherein on non payment of sixth premium the policy is auto surrendered and in another policy, the policy is 7 years old wherein five premiums paid followed by two years of automatic premium holiday. In second case, even no notice of grace period is given.
As per IRDA guidelines on (Treatment of Discontinued Linked Insurance Policies,) Regulation 2010 - "Provisions to discontinue the policy have been made for the policies where the premium is discontinued before lock in period, and no mention to discontinue the poliicy if premium are stopped after completion of lock in period.". Moreover, browsing through the IRDA website , it is understood that IRDA suggest all insurers and intermediearies to do all possible effort to reinstate the old policy as this is in the interest of the customer.
Please suggest is there any Regulation of IRDA where a customer cannot continue with the policy without paying premium. As far as my understanding about ULIP plan (as mentioned in FAQ PUBLISHED at IRDA Website) is that policy can be conttinued till the policy term until the fund value of the policy is not less than one year's full premium.
An earliest reply is requested to all the experts.
regards
