Unlike the first quarter (Q1) of 2021, the health insurance price index saw a major change in the second quarter with an increase of 4.87%, marking an increase in the prices of insurance premiums to ₹25,197 in the index value. The health insurance index had been constant during the two previous quarters, namely Q4FY20 and Q1FY21 at ₹24,026, according to the report.
A few health insurance companies have not raised the price of their premiums in the past two years, and then the drastic increase in the number of covid-19 claims led to this change. In addition, the complementary coverage of several diseases such as mental disorders, genetic diseases, neuro-related disorders, psychiatric disorders, etc., is responsible for the sharp increase in the prices of health insurance premiums.
Analyzing the impact by segment, the highest increase is therefore observed in the premium prices of the two adults category, i.e. 5%, followed by the two adults and one child category, i.e. 4.3%. At the same time, average premium prices fell 9.3% for the 46-year-old age group and the 10 lakhs insured category, according to the report.
In the second quarter of FY21, the main price change was undertaken by three insurance companies, with 24.5% being the largest increase, followed by 9.8% and 0.7%. However, the three remaining insurers have refrained from any sort of increase in their premiums, according to the report.
Health insurance premium prices are average prices taken from the six major health insurance companies for all age groups, namely 26 years, 36 years, 46 years and 56 years. This includes all types of coverage: one adult, two adults, two adults and one child, and two adults and two children.
In addition, the steadily rising term insurance price index again reflected a change with an increase of 2.79%, bringing the average term insurance premium price to ₹22,524 at T2FY21.
The average price of term insurance ₹1 crore of sum insured reached ₹29,007 in the previous quarter.
With the latest change, the term insurance space saw a cumulative 7.29% increase between T4FY20 and T2FY21 in India.
The incessant impact of covid 19 in India has resulted in a drastic impact on the term insurance category with an exceptional increase in the mortality rate.
Separating the impact into different categories, men in the 55-year-old age bracket top the ranking of premium increases of 3.3%, the highest jump among all age groups. Conversely, the average premium for the 25-year-old female age group rose to ₹9,307 at T2FY21, which is the smallest increase in premium prices at 1.4%.
In the first quarter of FY21, four in 10 insurers increased their premiums by approximately 24.5%, 3.7%, 1.6% and a minimum increase of 1.1%, respectively.
Age is the primary factor affecting term insurance premiums. Therefore, in the current scenario, delaying a 10-year term plan will cost 46.2% more for a 25-year-old and 72.7% more for a 35-year-old.
The premium prices mentioned are the average of 10 major insurance companies for the 25-year-old, 35-year-old, 45-year-old and 55-year-old age groups for both genders, smokers and non-smokers, according to the report.
The insurance industry as a whole has been escalating lately. The unprecedented pandemic scenario has put double pressure on the insurance industry, which the industry has struggled to manage in recent months. However, partial pressure must also be borne by customers, says Naval Goel, founder and CEO of PolicyX.com.
“Despite the rising prices, customers can get the most out of their plans by purchasing the right policies at the right age. If we refer to these last observations, then the largest increase is observed at the oldest age and the delay in taking out a policy certainly reflects an impact on premium prices. Remember that the additional premiums of the insurance plans now provide additional benefits and more security, so the customer always has an advantage in purchasing the insurance policies, ”Goel added.
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