Term Insurance Premium Hike: Here’s How You Can Lock In Premium At A Lower Rate
Highlight
- There is going to be a huge increase in the premium of term insurance plans
- According to experts, the premium can be increased by up to 40 percent
- Premium has remained more or less constant for the last 5 to 6 years
term insurance plan premium As reinsurers plan to hike rates and tighten their underwriting norms in the wake of the COVID-19 pandemic, they are set to increase by up to 40 per cent anytime. Covid-19 related casualties claim that the second wave could be one of the reasons for the term plan premium hike. Anilkumar Singh, Chief Actuarial Officer, Aditya Birla Sun Life Insurance said, “Reinsurers re-evaluate their prices on term plans as they are seeing stress on the business.”
“The reinsurance business is expected to see a rise in term insurance premiums due to rising stress. The growth is significant as term premiums have remained more or less stable for the past 5 to 6 years. It is important to remember that term plans are by Anilkumar Singh on IndiaTvNews. .com as “the simplest and most cost-effective” life insurance product on the market
What is term insurance?
Term insurance, also known as pure life insurance, is a type of life insurance policy that provides coverage for a specified period or specified “term” of years. The life cover term is chosen by the policyholder. On the death of the Life Assured at any time during the policy term or the time period specified in the policy and the policy is active, or in force, the Sum Assured (Life Coverage Amount) is paid to the nominee. While surviving the policy term, there is no maturity value. In other words, the guaranteed death benefit from the policy is the only value.
Why should one choose a “Term Insurance Plan”?
Amid the growing concern due to the Omicron version of COVID-19, it is essential to secure a financial future and have life insurance.
“Protecting one’s future financial needs with a term insurance plan is definitely good in the long run. Considering the increasing uncertainties in people’s lives, it is imperative to have a life cover with a term insurance plan and one of the safest options One is the financial future of one’s family members,” said Anilkumar Singh.
“It is prudent to evaluate the amount of money required to meet a person’s family as monthly expenses, to meet goals like education, marriage etc., and to pay off any debt. One should consider one’s annual income, lifestyle and worth. But one should assess the value. The future value of money,” he said.
How to lock term plan premium at a lower rate?
As insurers are negotiating with reinsurers on the quantum of increase, term plan premiums are set to be costly for policyholders. After this, people are looking for the best way to buy pure plan at a low rate. The hike in term plan premiums is likely to hit the pockets of new policyholders. Buying a term insurance plan allows you to lock in the entire policy term at lower rates before the increased rates take effect.
“That is why we are suggesting to buy now and lock the premium at a lower rate,” said Anilkumar Singh, adding, “The insurance premium hike will vary from one insurer to another.
Notably, once purchased, the premium remains constant for the entire term of the term plan, and future premium hikes do not impact the policyholder’s expenses.
Read also | Term insurance premium to increase by 40% from December 2021 know why
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