IRDA allows advance premium collection for policy premium due in a given financial year

After suspending advance premium collection for insurance policies under both participating and non-participating last year in April beyond a month period from the policy premium due date, the insurance regulator, IRDA, has again allowed advance premium collection. The step in the previous year was mooted to curb high scale money laundering activities.

As quoted in one of the business dailies, IRDA circular to the different life insurers stated ""Collection of advance premium shall be allowed within the same financial year for the premium due in that financial year".

The step shall come as a boon to policyholders who wish to honour the premium payments as and when they have funds at hand or want to tender small premium payments towards the policy well ahead of the due date and rest easy without any future worries for the premium payment obligation.

Also, in reference to the advance premium collection for the next financial year, the regulator mentioned that premiums for the next financial year can be collected for the maximum of three months in advance from the premium payment due date. And adjustment for such premium collected in advance shall be made only on the premium payment due date. Also, for the premium collected, commission shall also be paid to the concerned after premium adjustment on the due date.

GoodReturns.in

Story first published: Tuesday, March 25, 2014, 16:00 [IST]

Other articles published on Mar 25, 2014