An analysis of term insurance premium by an online insurance distributor PolicyX.com shows that the average premium of a term insurance policy with sum assured of Rs.1 crore is Rs.22,750.
It said that the premium amount has gone up marginally by 1% in a matter of one quarter. Term insurance’s average price index marginally increased by 1% to Rs 22,750 in Sep 21 quarter from Rs. 22,526 in the previous quarter, said the company. However, if we compare premium amount with the last quarter of FY 2021, the rise has been 3.8%.
The increase in premium prices is largely due to rise in covid-related claims and price hikes by reinsurance companies. “Of the 10 insurers forming the price index, 4 insurers have hiked premiums in the last quarter while 1 insurer has reduced the premium for term plans. Of these 4 insurance companies, a significant hike in the range of 10.6% to 12.6%. was seen amongst 2 insurers.”
|
Term insurance price index (Rs) |
||
|
Q1 2021 |
Q2 2021 |
Q3 2021 |
|
21,913 |
22,526 |
22,750 |
Hike was largely in the age group of over 35 years in men, finds the report. On the other hand, women aged 55 & above enjoyed a 1.6% reduction in premium prices.
|
Age Band |
25 |
35 |
45 |
55 |
||||
|
Gender |
Male |
Female |
Male |
Female |
Male |
Female |
Male |
Female |
|
Increase/-Decrease |
3.5% |
3.4% |
3.9% |
3.6% |
3.7% |
2.5% |
-1.3% |
-1.6% |
Talking about lifestyle habits, men who smoked paid 58% more premium than those who didn’t smoke. Likewise, women who smoked paid around 56% more premium.
An age-wise analysis indicated that men smokers aged 55 years & above paid 62% more premium prices than non-smokers. For women from a similar group, this difference was 59%. The price index in the case of people aged 25 & above, was the least impacted.
|
Age |
Gender |
Sum Assured (Rs. 50 lakh) |
Sum Assured (Rs. 1 crore) |
Average Premium |
||
|
Non-Smoker |
Smoker |
Non-Smoker |
Smoker |
|||
|
25 |
Male |
6,050 |
9,101 |
10,356 |
15,522 |
10,257 |
|
Female |
5,387 |
8,016 |
9,124 |
13,541 |
9,017 |
|
|
35 |
Male |
8,791 |
13,563 |
15,303 |
23,711 |
15,342 |
|
Female |
7,554 |
11,424 |
12,898 |
19,716 |
12,898 |
|
|
45 |
Male |
14,898 |
23,430 |
26,403 |
41,939 |
26,668 |
|
Female |
12,316 |
19,279 |
21,560 |
33,966 |
21,780 |
|
|
55 |
Male |
25,638 |
41,536 |
46,592 |
75,274 |
47,260 |
|
Female |
21,554 |
33,438 |
38,393 |
61,739 |
38,781 |
|
|
Average Premium |
|
12,774 |
19,973 |
22,579 |
35,676 |
22,750 |
The report also emphasized the importance of ensuring timely coverage. “Delaying a purchase of term policy by 10 years could cost on an average 47% more for a 25-year-old, 72% higher for a 35-year-old, and 78% higher for a 45-year-old,” stated the report.
The figures captured are based on average premium prices of top 10 life insurance companies in terms of their GWP (Gross Written Premium) prices. These companies include - LIC of India, SBI Life, HDFC Life, ICICI Prudential, MaxLife, Bajaj Allianz Life, Aditya Birla Sun Life, Kotak Mahindra Life, Tata AIA Life, and Canara HSBC OBC Life.