You should buy term insurance before premiums go up

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Although the deadline for Omicron, the new variant of the Covid-19 pandemic, is not fully known, based on what happened in the second wave, it should be a reminder that the life is uncertain, reinforcing the importance of life insurance.

The Omicron variant, which has put governments around the world on high alert, may have made people aware of the importance of health insurance, but life insurance is just as important. After all, the first and second waves of Covid claimed the lives of so many breadwinners.

When it comes to life insurance, term coverages are the most suitable as they provide maximum protection at lower premiums. Term insurance premiums are expected to increase in December, however, according to reports, so now might be a good time to take out coverage or top up what you already have.

Increase in term insurance premiums

“The term insurance industry has been under constant pressure due to the higher death rate recorded during the pandemic, which has placed considerable pressure on reinsurers. Therefore, to balance the losses, a leading reinsurer decided to increase its rates due to a further price hike in December, ”said Naval Goel, Founder and CEO of PolicyX.com, a comparison portal. insurance.

But how much will the increase be? “The increase can range from 20 to 30%, the actual ratio will depend on the insurance service provider, the load they can handle and the load they want to pass on to their customers,” Goel explains.

Even underwriting standards are expected to be tightened to reduce losses, Goel adds. Some term insurance companies focus on providing term insurance to people with a certain income bracket under the age of 40.

What should you do

Life insurance is crucial and should be a top priority. Rising or falling life insurance premiums should not influence the need to purchase or upgrade life insurance. Mortality rates, which cause insurance companies to adjust insurance premiums, are beyond our control.

“Term insurance coverage, being one of the tools for managing personal financial risks, is a necessity. Depending on insurance needs, one should opt for term insurance coverage whether or not premium rates increase in the near future. If you are considering going for term insurance coverage, it would be wise to analyze your insurance needs first (don’t choose a random amount, say Rs 1 crore or Rs 2 crore) and go for it. Just as being underinsured is bad, being overinsured is also pointless, ”says Arijit Sen, Sebi-registered investment advisor and co-founder of Merry Mind, a Kolkata-based financial advisory firm.

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