New Delhi: Purchasing term insurance plans is about to become costly for some customers as a few large insurance companies have introduced new conditions determining policy premiums.
Under the new terms offered by a few companies, clients who earn less than Rs 5 lakh per year and who are not graduates will have to pay more to purchase term insurance. In addition, major insurers have increased policy premiums to make them unaffordable for many.
In accordance with the guidelines of the Insurance Regulatory and Development Authority of India (IRDAI), all insurers in the country still offer standard term insurance plans. But they either increased the premium up to 3 times or offered the policy for a shorter period to make it unattractive to financially weak people.
In addition, a few insurance companies have also offered a minimum education qualification to purchase term insurance. A client must be a graduate to purchase the standard term insurance plan.
If the client is not a graduate, companies require proof of income of up to Rs 10 lakh of annual income. Reports suggest that increased premium policy and complicated rules for term insurance were introduced in the wake of the COVID-19 pandemic.
Reinsurance companies would also have increased compliance in the case of life insurance products. But that’s not all, since reinsurance premiums have also increased significantly.
In India, rates on term plans have remained low compared to other countries. For example, IRDAI’s standard Saral Jeevan Bima term insurance for low-income clients comes at much lower premiums than other policies.
Here are the rates of the term policy:
SBI Life – 30 year old male
The premium for the sum of Rs 50 lakh insured if you earn more than 5 lakh and graduate is Rs 9,614. On the other hand, if the client is not a graduate, the premium increases to Rs 15,518 and the sum insured goes down. at Rs 25 lakh in the Jeevan Political Saral.
HDFC Life – 30 year old male
The premium for Rs 50 Lakh sum insured if you earn more than 5 Lakh and graduate is Rs 9349. Whereas, the premium increases to Rs 9559 and the sum insured plunges to Rs 25 lakh under the Saral Jeevan policy of the bank if the client is not a graduate. Also read: Gold Lending Book Outlook in 2022: Huge Reach for Gold Lending for NBFCs and Banks, According to Muthoot Finance MD
Premiums for online direct term insurance plans for men, non-smokers, age – 30, sum insured – ~ 1 crore, income over 5 lakhs and graduate. The prices mentioned below include GST. Also read: Gasoline price reduced from Rs 25 / Liter in THIS STATE. Big advantage for owners of 2 wheels
March 2020 December 2021 Increase
LIC ~ 14,122 ~ 14,122 0%
HDFC Life ~ 12,478 ~ 16,207 30%
ICICI Prudential ~ 12,502 ~ 17,190 38%
SBI Life ~ 15,070 ~ 17,495 16%
Maximum service life ~ 10 148 ~ 11 858 17%
Source: Policy Bazaar, Licindia.in, Sbilife.co.in.