Term life insurance will get more expensive: how to get a policy that best fits your pocket
New Delhi: Term life insurance policies can become more expensive with reinsurance companies favoring more stringent underwriting guidelines amid high mortality claims. According to industry sources, reinsurers have increased their provisions to cover the increase in claims, particularly in the first half of 2021.
The numbers are also evident in the public disclosure of national life insurance companies. LIC saw its death claims rise to Rs 7,355.45 crore through the quarter ended June 30, 2021 compared to Rs 3,151.87 crore for the corresponding period a year ago. The trend in death claims is also on the rise among private life insurance companies.
Due to the high claims, reinsurers are offering more stringent underwriting guidelines. These include more financial information about policyholders, such as six-month payslip and bank statement, more medical tests and a higher sum insured.
How to get a font that best fits your pocket
It is important to note that there has been a tightening of premiums for term life insurers by several insurance companies over the past year. The increase in premiums is largely explained by the evolution of reinsurance premiums.
Therefore, the best way to save on costs, experts suggest, is to opt for a term insurance plan that best meets the individual’s needs and provides maximum benefits. Moreover, to reduce the premium amount on the pocket, one can opt for the monthly payment option.
Term insurance is a must for every individual, so it is suggested to purchase a term policy at a younger age as the rates are lower at a younger age. It is also advisable to purchase the temporary plan or increase the coverage before the new rates are announced.