If you look at the records of insurance companies, then no one is second to it. In the last one and a half years, the inflation of term plans has increased by several percent. HDFC Life’s term plan has become costlier by about 7 percent from 2020 to September 2021.
Term plans can once again be costly. The reason for this is that Kovid has made the biggest impact on the insurance sector. There is a possibility that the premium of the term plan may be increased for the second time in the last one and a half years. Term insurance plans will become expensive due to the cost of term insurance. Some companies have made their term plans costlier by up to 25%. It is likely to increase further in the future.
Due to Kovid, a big impact is being seen on the work of insurance companies. To compensate for this, insurance companies can make term plans expensive. With the increase in the cost of insurance companies, its burden is going to fall on the customers. In such a situation, if you are planning to take a term plan, then buy it soon because the premium will become expensive later. According to a media report, you may have to pay 20% more for a term plan later.
how expensive are the plans
If you look at the records of insurance companies, then no one is second to it. In the last one and a half years, the inflation of term plans has increased by several percent. HDFC Life’s term plan has become costlier by about 7 percent from 2020 to September 2021. Similarly, the term plan of ICICI Prudential has become costlier by 25%. Suppose a 30-year-old person takes HDFC Life Insurance of 1 crore sum assured, then he had to pay Rs 12,478 in March 2020, but in September 2021 this amount increased to Rs 13,352. Similarly, the premium of ICICI Prudential increased from Rs 12,502 in March 2020 to Rs 15,628 in December 2021. This increase is around 25%.
LIC increased the price
ACI Life grew 16% and Max Life 17% in the same period. SBI Life’s premium was Rs 15,070 in March 2020 which increased to Rs 17,495 in September 2021. Max Life’s premium increased from Rs 10,148 in March 2020 to Rs 11,858 in September 2021. It is worth noting that while almost all the insurance companies have increased the premium, LIC has not increased any kind. The premium for the term plan in March 2020 was Rs 14,122 which remained the same in September 2021 as well. Its rate is still the same.
Why is term insurance getting expensive?
Regarding why term insurance will be expensive, insurers say that they are under immense pressure from re-insurance companies. And this is the reason why insurance companies have to increase the premium money. It is also being said that the underwriting of re-insurance has been strictly enforced, which is making the insurance costlier. Some other changes that can happen, insurance companies can demand income proof, bank statement from their customers. Till now such documents were not being asked for. Companies can also tighten the conditions for medical checkups.
inflation due to corona
Insurance companies fix premium on the basis of insurance underwriting. The greater the risk involved in underwriting, the more expensive the premium can be. The risk has increased due to Corona, so companies have no other option but to increase the premium. In such a situation, it is important for the customers to keep many things in mind when they take a term plan. They must see the ratings of insurance companies and their financial condition. It should not happen that you take the plan but there is no money to pay the installment. In such a situation, whatever premium has been paid, there will be a possibility of getting trapped.
