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.
A few links for further reading
Insecure and uncertain in insurance business as Covid-18 damage claims mount
Insurance companies around the world were sailing smoothly, helped by growth in emerging markets and strong capitalisation. Things changed in late February when markets realised that Covid-19’s impact on insurers could be significant. Insurers are yet to know the full impact of the crisis as governments and regulators nudge them to give moratoriums to policyholders and quickly settle claims too. India’s insurance regulator has set strict deadlines for medical insurers to settle Covid-19 claims. General insurers face damage claims from businesses devastated by the national lockdown to contain the disease. Is insurance secured to survive, Joydeep Ghosh explains
There was a time when pay cuts we see today were a complete no-no; govt and public sector jobs were considered safe, as pay and pensions were both assured. Not any longer, it seems, writes T N Ninan
Quick approval, grace period
The COVID-19 pandemic has brought home the significance of health and life insurance like nothing else earlier. Even those who were blasé about these covers in the past are now looking to buy a new policy or want to enhance the sum insured on their existing ones. Meanwhile, the Insurance Regulatory and Development Authority of India (IRDAI) has been issuing a slew of guidelines to health/general and life insurance companies aimed at easing matters for customers.