Covid-19 crisis: Life insurers look to hedge against policy surrenders

The halt in economic activity, resulting in job losses and salary cuts across sectors, is keeping life insurers on tenterhooks. Given a fall in income levels, life insurers are keeping a close watch on surrenders and persistency numbers, as individuals may not be in a situation to pay premiums or continue their policies because of financial uncertainties.

As a remedy, life insurers are looking to provide short-term credit — known as bridge loans — to policyholders. Such loans come at a cheaper rate than personal loans, and can be repaid whenever the policyholder wants. Typically, these loans are available against