Opt for monthly payment of term premiums as insurers get set to hike rates

Several life insurers have hiked their term insurance premium rates recently. More are likely to follow suit in the near future. Rates are expected to move up across companies over the next six months. The industry may even adopt tighter underwriting norms.

Insurers set their term premium rates based on certain assumptions of what their mortality experience will be. Their actual experience has been worse than expected. Also, owing to competitive pressures, insurers have reduced their term policy premiums to unsustainably low levels.

Now, reinsurers have hiked their premium rates — by up to 40 per cent, according to industry sources.