IndiaFirst Life insurance raises premium for term insurance by up to 25%

NEW DELHI : New Delhi: IndiaFirst Life Insurance Co. Ltd has increased its premium for term insurance plans by up to 25% across different age groups.

Vishakha R.M., managing director and chief executive officer, IndiaFirst Life Insurance, said, "Term business is capital intensive and is dependent on reinsurance support. Due to the rise in claims on account of covid, we have seen an increase in rates by reinsurers, necessitating us to take corresponding action. We have marginally increased our rates mid-April 2021 by 10-25% for different ages/terms."

According to earlier reports, premiums for term insurance were expected to rise by up to 20% in 2021. However, the insurers are now expecting increases in prices even above 20%.

Term insurance plans typically are pure risk insurance, which is payable only in case of the death of the policyholder. “Currently in India, term insurance policies are extremely economically priced given that the key influencing factor is the expected mortality risk on the portfolio, that is, the incidence of loss due to death," said an insurance broker.

According to insurance distributors, some insurance companies have indicated that rates will go up later this month when the new reinsurance contracts come into force. These premiums were earlier set to be increased from 1 April but the hike was deferred due to delays from renewal of re-insurer contracts and new product approvals for few insurers, according to insurance brokers.

Source: Live mint