Insurers eye increases in premiums on term life policies

Insurers are indicating that term rates for life policies could rise 15-20% with effect from April because of higher reinsurance costs.

The insurance companies are now likely to insist on health checks as medically underwritten policies attract relatively lower reinsurance costs, reported Times of India quoting industry players.

Premiums on term insurance policies have dived more than 50% since liberalisation. Companies have offered term insurance of up to INR10m ($135,000) at a premium of INR6,000, which is considered low, as the market saw insurers engaging in a price war.

Previously too, insurers also accepted proposals without insisting on medical checks on the assumption was that those who are wealthier are better placed to take care of themselves or have access to medical treatment, thus reducing mortality risk.

Source: Asia Insurance Review