The premium for term insurance plans may increase soon

How the premium for term insurance is determined?

The premium for term insurance is calculated on the basis of several factors, which are –

• Gender – Women have lower average mortality rates than men. According to a recent study, women live about 5 years longer than men. This means that the risk of term insurance is lower for women as compared to men, hence the premium for term insurance is lower for women.
• Ages – As you get older, the term insurance premium also increases. The probability of death increases with age. Term insurance premiums remain largely unchanged until the age of 40 years. It grows every year after the age of 40.
• Period – Term insurance plans are usually for a particular time period. It can range from 10 years to 30 years. As the period increases, so does the price. This is because as the period progresses, you will become more old and you will also be more likely to have health problems.
• Mode – Payment modes can be monthly, quarterly, half-yearly or yearly. The premium also varies depending on it. Monthly installments are more expensive than annual payments. The payment you make is usually kept in the investment account, so that interest can be earned on it. The longer the premium paid by you will remain in the account, the more interest the company will get. In addition, on payment of several times a year, the insurance company has to bear more administrative expenses to process the payment.
• Rating Class – Each insurance company divides its customers into a pool based on risk. Each pool represents a square. Higher class rates are lower. It is based on medical history, family history, health status, your habits etc. These classes are often named Elite, Preferred, Standard, Standard Plus and Substandard. Rating classes may vary in different companies.

LIC Tech Term Plan

Offline and online term plan pricing

Price determination – The insurance sector has also come down due to the increasing impact of e-commerce and the increasing trend of common people towards online purchases. Any applicant can deal directly with the insurer online. In this method there are no brokers or agents between the insurance company and the client. Due to this, online plans are cheaper than offline plans. All the benefits of the scheme are directly transferred to the customer. Online term insurance, on average, is 40% cheaper than its offline counterpart.

insured amount – The sum insured also changes in the online term plan. Through the medium of online customers are assured of a higher sum insured at a lower premium. Its coverage ranges from Rs 5 lakh to Rs 5 crore. Although similar facility plans are also available offline, customers prefer to take an online term plan due to lower premium and higher sum assured.

The Reinsurance Company has informed all insurance companies that the insurance premium may be revised in the near future. So if you are not insured and want to get it done in future, then this is the right time for you. Otherwise you will have to get insurance by paying higher premium. You can choose a good plan for yourself based on the features and premiums of different insurance companies as per your convenience.