Taking a term insurance plan can be expensive, the terms of the policy will be more strict

Reinsurance companies can increase the premium of their term portfolio by more than 20 percent due to high claims in the second wave of Corona

During the Corona period (COVID19 Pandemic), the demand for term plans in life insurance has increased. A large number of companies have sold term plans to customers, but now it will not be easy for people to buy term plans in the future. This is because underwriting of term products that offer pure protection will have to be tightened by companies and companies may have to hike rates due to hike in reinsurance prices.

Due to high claims in the second wave of covid, reinsurance companies can increase the premium of their term portfolio by more than 20 percent. Life insurance companies will come under pressure and will increase the products most companies offer to customers.

Underwriting of term plans by insurance companies will be strict. Along with income proof, now companies can also ask for bank statement. In addition, conditions for complete medical examination may also apply for acceptance of the proposal. Actually, reinsurance companies are increasing the rates with more claims than expected.

Increased reinsurance rates will make it necessary for companies to pass on customers. After the change in the claim pattern, the premium of re-insurance is increasing. Those taking a new term policy will have to pay a higher premium. Old renewal will not be affected. Let us tell you, the rates of term plans in India are very low as compared to the countries of the world.

Term Insurance Premium (Inclusive of GST): A Fact 

(Male, Non Smoker, Age – 30, Duration – 40, Sum Assured – ~ 1 Crore)