The latest news on term insurance says that term insurance premiums will be hiked within the next 90 days.
This is based on a study conducted by a senior reinsurer for the past three months. A reinsurer is a company that covers the risk faced by other insurance companies. Therefore, a reinsurer along with the insurance company decides the price of a term life insurance plan. There is a need to hike the premium of term insurance plans.
Term insurance is based on the concept that the mortality rate among subscribers of each segment would be 25% of the death experienced by the average Indian population. But as per insurance companies, online prices are cheaper based on the assumption of mortality rate among subscribers to be 20% of the death experienced by the average Indian population. This means as mortality rate decreases; prices offered will also decrease.
Hence, online term insurance plans are cheaper than offline plans. They have the added advantage of lesser documentation, lower fees and so on.
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Term insurance premiums are calculated based on a number of factors:
See Also: 10 Best Things About Term Insurance
The reinsurers have notified all insurance companies that term insurance premiums will be revised in the near future. As reinsurers endure higher costs, they pass it on to insurance companies, which means term insurance premium hike. We can expect all top insurance companies to increase their premiums in the next 3 months.
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