The price indices for health and term insurance mark a huge jump in the second quarter: report

In contrast to the first quarter (Q1) of 2021, the health insurance price index saw a significant shift in the second quarter with an increase of 4.87%, indicating an increase in insurance premium prices 25,197 in index value. The health insurance index was constant in the two previous quarters, namely Q4FY20 and Q1FY21 at 24,026, according to the report.

Some health insurance companies have not increased their premium prices in recent years and then the radical increase in the number of claims caused by Covid-19 led to this change. In addition, the additional coverage of several illnesses such as mental disorders, genetic diseases, neurological disorders, psychiatric disorders, etc. is responsible for the sharp rise in health insurance premium prices.

If one analyzes the effects segment by segment, the highest increase in the premium prices can be seen in the category two adults, ie 5%, followed by the category two adults and one child, ie 4.3%. In addition, the average premium prices for the age group 46 and the sum insured of 10 lakh plummeted 9.3%, the report said.

In Q2FY21, the largest price change was made by three insurance companies, with 24.5% being the highest increase, followed by 9.8% and 0.7%. However, the remaining three insurers waived any kind of premium increase, the report said.

The health insurance premium prices are average prices of the six leading health insurances for all age groups, i.e. 26 years, 36 years, 46 years and 56 years. This includes all types of insurance – one adult, two adults, two adults and one child, and two adults and two children.

In addition, the steadily rising price index for term insurance, with an increase of 2.79%, again reflected a change, thereby increasing the average price of the term insurance premium 22,524 in Q2FY21.

The average insurance price of 1 million sum insured reached 29,007 in the previous quarter.

With the recent shift, the term insurance space in India has seen a cumulative increase of 7.29% between Q4FY20 and Q2FY21.

The relentless effects of Covid 19 in India have had a drastic impact on the term life insurance category with an exceptional increase in the death rate.

If the effects are broken down into different categories, men in the age group 55 lead the list of premium increases of 3.3%, the highest jump of all age groups. Conversely, the average premium for the 25-year-old female age group rose 9,307 in Q2GY21, which is the smallest increase in premium prices at 1.4%.

In Q1FY21, four out of 10 insurers increased their premium values ​​by around 24.5%, 3.7%, 1.6% and by at least 1.1%, respectively.

Age is the most important factor in term life insurance premiums. Therefore, in the current scenario, postponing a term plan by 10 years costs 46.2% more for a 25-year-old and 72.7% more for a 35-year-old.

According to the report, the mentioned premium prices are averaged by 10 leading insurance companies for the age groups 25 years, 35 years, 45 years and 55 years for both genders, smoking and non-smoking categories.

The entire insurance industry has been escalating recently. The unprecedented pandemic scenario has put double pressure on the insurance sector, which the industry has been trying hard to cope with in recent months. But customers also have to bear the partial pressure, explains Naval Goel, founder and CEO of PolicyX.com

“Despite the price hike, customers can get the most of their plans by getting the right policies at the right age. Based on these latest findings, the biggest increase is seen in old age and the delay in taking out a policy certainly reflects an impact on premium prices. Not to forget that the additional premium prices of insurance plans now offer additional benefits and more security, so that the customer always has an advantage when taking out the insurance, “added Goel.

Subscribe to something Mint newsletter

* Please enter a valid email

* Thank you for subscribing to our newsletter.

Never miss a story again! Stay connected and informed with Mint. Download our app now !!

Comments are closed.