Insurers Hike Life Insurance Premium Rates By 4-7%
Private life insurance companies are likely to increase their term insurance premiums by 4-7%, according to a report published by Business Standard [1]. Prominent names like HDFC Life, ICICI Prudential, Bajaj Allianz, and Max Life Insurance are among those expected to implement these changes due to bond yields, inflation concerns, and adjustments in reinsurance rates.
Let’s understand the reason behind this hike in detail!
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Higher Bond Yields are generally positive for all insurance companies, but they also lead to increased costs. This may be one of the reasons why these organisations are considering increasing premiums.
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Inflation: Inflation makes everything more expensive over time, including the benefits promised by insurance policies. To keep up with these rising costs, insurers need to adjust premiums accordingly.
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Reinsurance Rates: Reinsurance is when insurance companies share their risk with other insurers. If reinsurance rates go up, the primary insurers need to pay more. To balance this out, they raise their premiums.
What Does This Mean for Policyholders?
For existing policyholders, the increase in premiums may come as a surprise. But we can’t ignore the fact that these companies support in situations when financial help is required the most. So, it’s vital to understand that these adjustments are only made to keep up with the long-term sustainability of the insurance products.
Connect with a financial advisor if you want to know the impact of these changes on your existing policies by calling us at 755 1196 989 or by emailing on support@insurancedekho.com
Reference:
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https://www.business-standard.com/finance/news/top-private-life-insurance-firms-hike-term-policy-premium-by-4-7-124071001205_1.html
