A number of insurers are mulling an increase in the premium rates for term life insurance this year after two years of high claims from the COVID-19 pandemic.
However, the quantum of increase may not be as high as in the past few years and is likely to be in the 5-8% range this time, reported Financial Express citing industry sources.
“Unlike in previous years, this time, the increase would be in the single digit,” said an insurance company executive, adding that the increase in term cover premiums will also be due to hikes in reinsurance rates in the last few years during the pandemic, which some insurers did not pass on to customers at the time.
Another insurance player said, “The past two years have seen high claims for the life insurance industry due to the pandemic. Also, while reinsurers had increased rates, some insurers chose to absorb them at that time and not burden the customer.