Premium rates have also increased for health insurance policies with a larger increase for the elderly
Posted on 09.27.21, 01:08 AM
Term life insurance policies may become more expensive with reinsurance companies in favor of stricter underwriting guidelines in the context of high mortality claims.
According to industry sources, reinsurers have increased their provisions to cover rising claims, especially in the first half of 2021. Munich Re, the largest foreign reinsurer in India, for example, has increased its provisions by 241 million. euros in the second quarter. calendar year 2021 due to higher than expected mortality in India and South Africa.
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.
âAlready in the last 18 months, there has been a 25 to 30% increase in premium rates. Further compliance with the tighter guidelines from October could lead to increased costs for the insured, âan industry source said.
Premium rates have also increased for health insurance policies, with the increase more pronounced for the elderly. Increase in the loss rate, standardization of policies, medical inflation largely due to the Covid pandemic are among the factors contributing to the rise in rates.
âThe majority of grievances and complaints in health insurance are related to the lack of understanding of the product purchased. Individuals should inquire about the waiting period, co-payment sub-limits, sum insured, top-up options, non-payable, welfare discounts when purchasing policies â said S. Prakash, CEO of Star Health Insurance.