Term life insurance plan premiums are set to go up with several service providers across the industry looking at raising the prices, said experts on Thursday.

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The development may come as re-insurers players have increased the premiums rates and all protection plans offered by domestic insurers are supported by these re-insurers.

According to Rakesh Goyal, Director, Probus Insurance, in the last one year there has been an increase in the premiums for term insurance plans.

During the start of 2020-21, Goyal opines, there was a correction in the premium for term insurance plans as re-insurers players raised the rates.

"The re-insurers started increasing prices in April 2020. Since the pricing of insurers depends on re-insurer pricing, the insurers also started increasing prices but not to the same extent. Some insurers waited or absorbed some price increases by themselves. Therefore it is now expected that the insurer who absorbed the price increase by themselves will start passing it on to the customers due to which another price increase is a possibility," adds Naval Goel, CEO and Founder at PolicyX.

Indraneel Chatterjee, Co-Founder and Principle Officer at RenewBuy seconds Goel's views.

"Last year, the premium increase did not happen across the board; some insurers had hiked rates between 5-40 percent, others had not. This year, due to COVID 19 pandemic, mortality rates have been higher than the assumed premium calculations. The number of claims has been rising and the mortality rate has grown by far, resulting in rise in premium for re-insurers. Thus it is expected to make an impact on the premium offered by insurers," Chatterjee illustrates.

The best way to save on cost, he adds, would be to go for a term insurance plan which suits the requirements of the individual and thus give maximum benefit. To make the premium amount pinch less on pocket, one can go for monthly payment option.

Term insurance is a must for every individual, hence it is suggested to buy a term policy at a younger age, as rates are less at a younger age.

Chatterjee further suggests consumers to buy the term plan or increase coverage; before the new rates are announced.

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(Edited by : Ajay Vaishnav)

First Published:Mar 4, 2021 10:41 AM IST