Insurance term plans to become expensive; reinsurance companies to increase rate by 20-50%

If you are planning to buy a term insurance plan, then you must hurry-up! The premiums on insurance plans are likely to go up soon. If this is not already enough, expect more terms and conditions when you go to buy a term policy. See full report!  

How much premium hike is expected? Why is this happening? What are the new terms and conditions expected? Senior Special Correspondent Anurag Shah answers all the queries in detail.  

Shah added that after the COVID-19, the demand for the term insurance has spurred. Now, buying a term insurance in India won’t be easy and in coming days the policy buyers will have to shell off more on term insurance premium.  

He further added that the reason behind this increase is all life insurance companies reinsure their term portfolio from other reinsurance companies. So, reinsurance companies have already shared notice that they will increase rates by 20-50 per cent. In coming days, most of the companies are expected to increase the price of their term insurance.  

However, this price hike may differ due to company’s volume and its territory, he added. But this is for sure that there will be a price hike. Similarly, earlier it was easy to buy a term insurance but now it will become a difficult process.  

Shah added that as the reinsurance companies have now stern the policies’ term and condition. Now, the policy buyers will be asked to submit income proof, salary proof, along with full body checkup details.

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He further added that in the past 18 months, most of the companies have increased the premium rate. ICICI Prudential has increased 25 per cent, SBI Life 16 per cent, Max Life 17 per cent, HDFC Life 7 per cent.  

The premium has hiked for 30 years of age for Rs 1-crore sum assured non-smokers, salaried. LIC is the only company that has not increased the premium amount of its online tech term plan, Shah said.