NEW DELHI: After ICICI Prudential Life and HDFC Life Insurance increased the premium of their respective term plans in December 2021, more insurers are following suit.
Bajaj Allianz Life Insurance also hiked the premium on term insurance plans on Sunday night by around 15%, while Tata AIG Life and Birla Sunlife Insurance are likely to increase the term insurance premiums by this weekend. Max Life is likely to do it by this month-end.
Various distributors and insurance agencies told TNIE that the hikes in premium range from 10-30% across different insurers and segments.
Sources said that ICICI Prudential Life, which effected the hike around December 20, increased the premium on an average by 10-12%.
HDFC Life has increased the premium from 17% to 30% (the average hike is around 22% across different segments), and Bajaj Allianz Life has made the term plans costlier by 15%.
An insurance distributor told TNIE that Tata AIA Life Insurance may increase the premium by 25-30%. While HDFC Life and Bajaj Allianz Life confirmed that they have increased the premium of term insurance plans, others were not available for comments.
The increase in premium of term insurance plans was expected after the reinsurance companies in September conveyed their plans to increase the cost of reinsurance by 30-45%. An official from an insurance distributor told TNIE that ever since the reinsurers had conveyed their intention to increase the cost of reinsurance, the insurers were waiting for someone to go ahead and take the lead in increasing the premium.
“ICICI Prudential Life did it first and then others followed,” said the official.
However, not all of them have gone for uniform hikes. Some may do it in one go and others may do it in phases.
“ICICI Prudential went for a smaller hike but it has made its underwriting process more stringent. It has decided to not offer term plans to undergraduates. It has also doubled the threshold income of both salaried as well as self-employed to be able to avail a term plan,” said another distributor.
Hikes in premium range from 10% to 30%
Various distributors and insurance agencies told TNIE that the hikes in premium range from 10-30% across different insurers and segments.
HDFC Life has increased the premium from 17% to 30% and Bajaj Allianz Life has made the term plans costlier by 15%.