In quarter 4, 2021, the average yearly premium for a sum assured of Rs 1 crore increased to Rs 30,720 from Rs 29,443 in the third quarter.
According to PolicyX.com, out of 5 life insurance companies, as many as 3 companies have revised their premium prices wherein the biggest increase was 13.4% followed by 4.9%, and 0.9%. The remaining 2 companies kept their premiums constant.
AVERAGE PREMIUM PRICE – SUM ASSURED
PREMIUM PRICE VARIATION- AGE
“The re-insurers and insurance companies have employed their best efforts to provide complete convenience to policyholders by settling the maximum number of cases. However, on the contrary, they were forced to hike the term insurance premium prices to manage the financial pressure. Along with that, the underwriting of term insurance prices has also gone stricter to ensure the reduction in the losses caused to the term insurance companies in the future,” a PolicyX.com press release stated.
This is the fourth ‘Insurance Price Index’ report launched by PolicyX.com. The index tracks prices of term insurance and health insurance from insurance companies, offering analysis and trends through data analytics.
Naval Goel, Founder & CEO, PolicyX.com said, “Data shows that very few companies have raised prices and the insurance companies have been benevolent towards customers by increasing premium prices gradually. However, the constant increase in claims has also resulted in the tightening of underwriting norms.”
Analysing on the basis of the age factor, the term insurance price variation widened with the increasing age of an individual in the last quarter. Delaying a purchase of term policy by 10 years could cost on an average 48.9% more for a 25-year-old, 77.6% higher for a 35-year-old and 80.8% higher for a 45-year-old.
In terms of habits, the smoker male paid 50.5% higher than a non-smoker male and a smoker female paid 49.5% higher than a non-smoker female in the last quarter.
Health insurance premium trends
The Health Insurance Price Index maintained a similar index value in Quarter 4, 2021, as it had in prior quarters. Since quarter 1, 2021, the index value of the Health Insurance Price Index has remained constant at Rs 25,124, indicating no change in health insurance premium pricing.
In quarter 4 of 2021, an average 26-year-old paid Rs 8,274 in yearly premiums for an amount insured of Rs 5 lakh and Rs 10,403 in annual premiums for a sum insured of Rs 10 lakh for 1 adult category.
The premium for health insurance does not rise in lockstep with the amount insured. On average, a 36-year-old male paid Rs 9,519 for the sum insured of Rs 5 lakh and Rs 12,183 for the sum insured of INR 10 lakh in the fourth quarter of 2021. Despite a 100 percent rise in the sum insured, the premium only climbed by 28% in this scenario.
PREMIUM PRICES VARIATION – SEGMENT
“Buying a family floater plan stands out as a cost-effective alternative because it has become vital to insure every member of the family under health insurance for financial aid, regardless of their age. Because adding another person to the floater plan only results in a minor increase in the premium,” stated PolicyX.com.
According to the Quarter 4 report for 2021, a premium paid for two adults 36 years old was Rs 13,921, and a premium paid for two adults and one child in the same age category was Rs 16,530 for an amount insured of Rs 5 lakh, PolicyX said.
Of the 5 companies, forming the index, the variance observed in premiums among the health companies is quite high (ranging from 59% to 76% for different age groups) as compared to variance observed in term insurance companies. This is primarily because of the fact that coverage, features, and benefits differ significantly for health insurance whereas term insurance is usually simple with similar benefits in case of death.