The Indian insurance industry has been experiencing adversity in terms of claims amid surging covid cases, and this in turn is hurting consumers as re-insurers hike premium prices.
In the fourth quarter of 2021, the term insurance price index value has gone up by 4.18% to ₹23,929. Insurance web aggregator PolicyX.com’s report shows a huge difference of 9.75% in the term index value between the first quarter and the fourth quarter.
Naval Goel, founder and CEO, PolicyX.com said, “This is the result of immense pressure endured by the insurers and re-insurers due to the Covid-19, causing a high mortality rate faced by the country in recent times. The re-insurers and insurance companies have employed their best efforts to provide complete convenience to policyholders by settling the maximum number of cases. However, on the contrary, they were forced to hike the term insurance premium prices to manage the financial pressure. Along with that, the underwriting of term insurance prices has also gone stricter to ensure the reduction in the losses caused to the term insurance companies in the future.”
Out of five life insurance companies, as many as three companies have revised their premium prices wherein the biggest increase was 13.4% followed by 4.9%, and 0.9%. The remaining two companies kept their premiums constant, as per the Insurance Price Index data.
Analyzing on the basis of the age factor, the Term Insurance Price variation widened with the increasing age of an individual in the last quarter. Delaying a purchase of term policy by 10 years could cost, on an average, 48.9% more for a 25-year-old, 77.6% higher for a 35-year-old and 80.8% higher for a 45-year-old.
In terms of habits, the smoker male paid 50.5% higher than a non-smoker male and a smoker female paid 49.5% higher than a non-smoker female in the last quarter. Habits seem to have a considerable effect on premiums for both genders, as per the Insurance Price Index data.
The mentioned premium prices are averaged from five leading insurance companies for various age groups i.e. 25 years, 35 years, 45 years and 55 years for both genders and smokers & non-smokers category and for a sum assured of ₹50 lakh and ₹1 crore.