According To – Rajkotupdates.News: Will the Covid-19 Third Wave Affect Life Insurance Premiums? Recent rate hikes for term insurance have been caused by a rise in premium rates by reinsurers. The rate hike occurred after a large amount of damage was caused by the second wave of Covid-19 in April and May 21. This caused a high rise in claims, which hurt insurance companies’ margins. As life insurers haven’t fully studied the effects of the third wave yet, they’re taking a “wait and see” approach before raising premiums.
“Reinsurers have raised their rates by about 30% in the past year, which is in line with the number of deaths they have seen in recent years.” IndiaFirst Life’s Deputy Chief Executive Officer Rushabh Gandhi says almost all life insurance companies have raised their premiums by more than 20% as a result.
Gandhi says, “So far, the third Covid wave doesn’t seem as bad as the first two. As a result of high vaccination rates in eligible communities, death rates have remained low. However, life insurance companies are taking a cautious “wait and see” approach as the third wave has not yet been fully studied and understood. IndiaFirst Life does not expect premium rates to increase in this fiscal year, but we are taking extra precautions during the screening process.
According to Rakesh Goyal, Director of Probus Insurance, HDFC Life, ICICI Prudential, and Bajaj Allianz Life have increased term insurance rates so far. Other insurance companies are also likely to raise their rates. Re-insurers wanted to raise the prices by 40–50%, but insurance companies only raised them by 20–30%.
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Although the number of cases has been increasing in the last few days, Goyal says there have been no deaths from the latest strain, which is different from the second wave. It is still too early to predict what the effects of the third wave will be. Term plan rates will change if things get out of hand in the next few days and more people die.”
According to PolicyX.com’s “Insurance Price Index,” the value of the Term Insurance Price Index increased by 4.18 percent in Q4, 2021. Between Q1 and Q4, 2021, the value of the term index increased by 9.75%.
According to an Emkay Global Financial Services report on life insurance, reinsurers’ claim experience in pure protection was getting worse before the severe second Covid-19 wave occurred. Only a few products and insurers have been experiencing this slowly over the past few years.
Due to the increased claims caused by the second wave, reinsurers had to raise rates more quickly and more sharply to compensate for some of the losses caused by the rise in claims and to compensate for the lower death rates in individual protection portfolios in recent years.
What is the right way to act?
As most of the price changes are reflected in the older age groups, who are more prone to dying, they are the ones most affected by them. Buying early is the best way to do it. Another important thing to do before buying is to compare prices. A policyX.com founder and CEO recommends comparing premium prices online before purchasing.Rajkotupdates.News: Will the Covid-19 Third Wave Affect Life Insurance Premiums?
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