The constantly increasing Term Insurance Price Index has once again reflected a change in the index price of a 2.79 percent surge
Health and term insurance rates have seen an increase in the April-June 2021 period according to data by insurance web aggregator PolicyX.
The 'Insurance Price Index' data for the second quarter of 2021 showed that there is a drastic shift in the insurance price index of both term Insurance & Health Insurance.
Unlike Q1 of calendar 2021, Health Insurance Price Index witnessed a major shift in the April to June period with an increase of 4.87 percent, marking a surge of insurance premium prices to Rs 25,197 in the index value.
The Insurance Price Index of Health Insurance had been constant in the last two quarters i.e. Q4, 2020 and Q1, 2021 at Rs 24,026.
The data showed that this is due to the twin factors of health premiums staying unchanged for the past few years and rise in COVID-19 claims.
It also said that the additional coverage of several diseases such as mental disorders, genetic diseases, neuro-related disorders, psychiatric disorders, is responsible for the sharp increase in the health insurance premium prices.
Analysing the impact segment-wise, then, the highest surge is witnessed in the premium prices of the 2 Adults category i.e. 5 percent followed by the two adults & one child category i.e. 4.3 percent.
Term insurance see surge too
The constantly increasing Term Insurance Price Index has once again reflected a change in the index price of a 2.79 percent surge, taking the average price of term insurance premium to Rs 22,524 in Q2 2021.
Now, the Term Insurance average price of Rs 1 crore sum insured has reached to Rs 29,007 in the last quarter.
With this latest shift, the term insurance space has a cumulative surge of 7.29 percent in the span of Q4 2020 to Q2 2021 in India.
"The unrelenting impact of COVID-19 in India has laid a drastic impact on the Term Insurance category with an exceptional shoot up in the mortality rate," said the report.
Segregating the impact into different categories, males, in the age bracket of 55-years, tops the chart in the list of premium increases by 3.3 percent i.e. the highest jump among all age groups.
Conversely, the average premium for the female age group of 25-years increased to Rs. 9,307 in Q2 2021, accounting for the lowest hike at 1.4 percent.
Age, being a paramount factor affecting the term insurance premium, lays a big impact on the premium prices. Hence, in the current scenario, delaying a term plan by 10 years will cost 46.2 percent higher for a 25 year-old and 72.7 percent higher for a 35 year-old person.
The mentioned premium prices are averaged from 10 leading insurance companies for various age groups i.e. 25 years, 35 years, 45 years and 55 years for both genders and smokers & non-smokers category.
The index tracks prices of term insurance and health insurance from the leading Indian insurers.
"The overall insurance sector is experiencing an escalation in recent times. The unprecedented scenario has laid doubly pressure on the insurance sector which the industry tried hard to manage in the last few months. However, the partial pressure has to be borne by the customers as well," said Naval Goel, Founder & CEO, PolicyX.com
Goel said that despite the price rise, customers can make the best out of their plans by making the purchase of the suitable policies at the right age.
As per the latest findings, he explained that the biggest hike is spotted at the higher age and the delay in the purchase of a policy certainly reflects an impact on the premium prices.