10-15 per cent: Likely increase in term plan premiums.

Business Standard
17th March

10-15 per cent: Likely increase in term plan premiums.

  • Six private life insurance companies are likely to increase their term premium plans by 10-15 per cent in April. The Life Insurance Corporation, the country's largest life insurer, however, does not have any plans to raise rates.
  • Private-sector insurers are raising their rates primarily because their mortality experience has been more adverse than expected, due to the Covid pandemic.
  • Their reinsurers have hiked their reinsurance premiums, forcing these insurers to pass on their higher costs to customers.
  • Term premium rates were hiked last year as well. Owing to competitors’ pressures in the market, insurance companies have been reducing their premium rates.
  • At the same time, underwriting standards have slipped, resulting in higher mortality experience than expected in certain customer segments.
  • If you don't have term insurance or need to augment your cover, buy a plan right away before the new rates kick in. Go to an online aggregator's website and compare rates, then select something that suits your pocket.
  • Buying online will help you save on the agent's commission. Selecting a longer premium payment option will also lower your premium.
  • Choosing the monthly payment option, instead of the annual one, will also weigh less heavily on your pocket.

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