A report released by PolicyX.Com, an online insurance distributor reveals that the average premium of a term insurance with sum assured of Rs.1 crore has increased from 29,443 to Rs.30,720 in just three months, a growth of 4% in annual premium price.
The web aggregator report attributes the hike in premium prices to covid-19 claims and revision of premium by re-insurers.
Three out of the five insurers forming the price index created by the distributor have increased premiums prices in Dec 2021 quarter while the other two insurers have kept premium prices unchanged. The hike was reported to be 13.4%, 4.9% and 0.9% for the three companies.
“Term insurance price index observed a premium variation of 20.25% in terms of gender. The male category seems to pay higher term insurance premium prices vis-a-vis the female category”, pointed PolicyX.com.
An analysis basis the age revealed that the term insurance premium price variation widened with the increasing age. Postponing the purchase of term insurance by 10 years could result in a 48.9% higher premium for a 25-year-old. This variation further widens to 77.6% for a 35-year-old and 80.8% for a 45-year-old.
Commenting on the lifestyle habits, PolicyX.Com pointed out, men who smoked paid 50.5% more premium than men who didn’t smoke. Likewise, women who smoked shelled out 49.7% more premium prices than other women. The impact of smoking on premium prices was higher amongst the higher age group, for both men and women.
Index Computation Methodology
The companies considered in the analysis are Kotak Life Insurance, HDFC Life, ICICI Prudential, Max Life, and Bajaj Allianz Life.
The prices represent the average annual premium payable (as of the quarter ended Dec 2021) against a sample profile based on age, gender, and smoking status. In addition, the analyses also factors in the sum assured and the policy type (term insurance) for a comprehensive evaluation. It is important to note that the insurer’s individual rate may vary depending on age, gender, health profile, sum assured & coverage type.