Insurance for retrenched

NOT having insurance in times of economic uncertainty is like being caught in the rain without an umbrella these days.

To help those who have been retrenched, AXA Life Insurance Singapore on Monday launched the Unemployment Benefit Programme, which allows such policy holders to defer insurance premium payments for a year.

If the policy holders lose their jobs in the coming months, they can either choose to have a full refund of all their premiums paid up to that point, or opt for a 365-day grace period, during which they pay no premiums. Interest will also be waived on the outstanding premium amount.

Said Mr Gilbert Pak, AXA's chief executive here: 'Clients are worried about their immediate livelihood and may defer their long-term protection needs until the economy recovers. It is more important now than ever for clients to be covered in the event of unexpected circumstances.'

Latest figures from the Life Insurance Association (LIA) show that people are deferring the purchase of new policies as the economic recession bites deeper.

Premiums for new policies plunged by 64 per cent to $1.04 billion in the fourth quarter of last year, from a year ago, said LIA.

Fourth-quarter sales of single-premium products, which require an initial lump sum payment, slumped an even bigger 69 per cent to $811 million.

Regular-premium sales for the fourth quarter were down 16 per cent to $228.8 million, while single-premium sales for the full year totalled $7.64 billion, a 14 per cent drop over 2007.

AXA is upbeat that its sales will rise by 30 per cent with the launch of its new scheme, as 'clients need not worry about sustaining their financial commitments if they are involuntarily unemployed', said Mr Pak.

Both options under the new programme are extended to clients who take out new AXA regular premium plans between now and May 31.

Eligible clients may then choose to exercise either option if and when they are laid off within 12 months from the policy issue date.

Asked how much in premiums it is expecting to forgo for the year, AXA said: 'We have done our internal risk analysis, and we are confident and comfortable of the financial implications.'

- The Straits Times