As the COVID-19 pandemic continues to impact the world, life insurance companies in India have been forced to take a more cautious approach to their policies. Recently, many of these companies have increased their term insurance rates by 20-30% due to a surge in premium rates by reinsurers. This increase was a response to the damaging second wave of COVID-19 in India during April and May 2021 as reported in rajkotupdates.news : corona third wave affect life insurance, which led to a sharp rise in claims and affected the margins of insurance companies.
Third Wave Impact on Premiums
With the impact of the third wave still being studied, life insurers are taking a more vigilant approach toward underwriting. However, according to Rushabh Gandhi, Deputy CEO of IndiaFirst Life, the company does not anticipate a further increase in premium rates in the current financial year. Although the third wave’s mortality rates continue to remain in check due to vaccine penetration, the impact of the wave is yet to be completely understood.
Insurance Price Index
As some life insurance companies, such as HDFC Life, ICICI Prudential, and Bajaj Allianz Life, have already increased their term insurance rates, other insurers are expected to follow suit. The re-insurer player had asked the prices to increase by 40-50%, but insurers have only increased them by 20-30%. According to PolicyX ‘Insurance Price Index,’ the Term Insurance Price Index Value has gone up by 4.18% in Q4, 2021. If things go out of control and there are more casualties, there may be a revision in rates of term plans going forward as reported in rajkotupdates.news : corona third wave affect life insurance.
Buying Life Insurance
Experts recommend buying life insurance early in life, as major price changes are reflected in the older age categories carrying higher risk. It is also essential to compare prices before buying, as different companies offer different prices. Naval Goel, the Founder, and CEO of PolicyX, suggests that the best way to buy insurance is to start early in life. This is because the premiums increase as you get older, and the risk to your life is higher. It’s also important to compare prices before making a purchase, as different companies offer different prices for the same coverage. So, it’s a good idea to look online and compare the premiums of different insurance companies before making your decision.
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In conclusion, the COVID-19 pandemic has had a significant impact on life insurance premiums in India. With the third wave still being studied, life insurers are taking a more cautious approach to their policies. While some insurers have already increased their term insurance rates, others may follow suit if things go out of control. Therefore, it is important to buy life insurance early in life and compare prices before making a purchase to get the best deal possible.
