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Why cost of term insurance may increase soon?

Over the last few years and due to the pandemic, insurance companies have observed high mortality rates thus compelling them to increase term plan premiums.

Author:IndiaFirst Life | Date:01 Jul 2020 | Time:15:30:00

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Over the last couple of years, and also owing to the pandemic, the industry has been experiencing higher mortalities than assumed in the premium calculation. Here the current level of premium rates have become unviable. This is compelling them to increase term insurance premiums because re-insurers have revised their premiums upwards.  And life insurers have to pay for re-insuring their risk because of this.

According to Policy bazaar, in the past one month, few insurance companies have already increased the prices of term life insurance plans by up to 20 per cent.

How does it work?

The actual versus expected claims are measured to price insurance plans. And, if the ratio is more than expected, it leads to a negative experience for insurers and re-insurers. Therefore, with the ratio being more and negative mortality experience, reinsurers have increased their rates for life insurance companies.

However, many life insurers have not increased term insurance premiums as yet. According to sources, some insurers are still considering whether they should pass on the hike from re-insurers to policy buyers.

Conclusion

With several changes being incorporated, this is probably the best time for customers to buy term life insurance policy. Since, the earlier you buy the lesser you pay. IndiaFirst Life still has some of the most affordable term life covers that can help them protect their loved ones even during such times.

Check out our affordable term plan options by clicking here!

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IndiaFirst Life

Headquartered in Mumbai, IndiaFirst Life Insurance Company Limited (IndiaFirst Life), with a paid-up share capital of INR 663 crore, is one of the country's youngest life insurance companies. Our key differentiators are our simple, easy-to-understand products that are fairly-priced and efficiently serviced. We offer a diversified suite of over 46 need-based products & Riders (as of 31st March 2022) catering to varied customer segments, leveraging multiple distribution capabilities and augmenting various investment options. In all, propositions under the categories of Protection, Assured Savings, Wealth, Pension, Health and Group Funds for Employee Liabilities form a complete suite of offerings that help our customers prepare for the certainties of life. Our products are easy to understand and competitively priced with risk management bein.

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