You must Sign In to post a response.
  • Category: Insurance

    Is Insurance policy going to be costlier in 2020 ?


    Planning to take up an insurance policy? Worried whether the cost of the insurance policy will rise or go low? Check out this page where our ISC experts have responded to your query.

    I have heard that insurance policies to become costlier in coming days. But I want to below in detail:
    1. What kind of insurance policies will be costlier- Life insurance or general Insurance. Some body told me that third party insurance policies for cars, two wheeler to go up.
    2. What would be the hike rate of insurance policies category wise.
    3. What would be the effective date of insurance hike, whether it is 1st April 2020 or June 16, 2020.
  • Answers

    5 Answers found.
  • It is our experience that the price of everything is increasing. So in the case of Insurance premium also we can expect a rise in premia in future.

    As insurance is risk compensation, compensating with money, the insurance companies will periodically review the risk perception from experience history, trend and also due to the newer risks covered. The premium also is affected by the government applying or increasing tax, cess or any other charges on it.
    In the case of life insurance and medical insurance age is also a risk factor. Hence premium increases with an increase in one's age.
    So it is just prudent to start life insurance or medical insurance as early in life as possible.
    It is easy to predict the increase in premia except o the increase due to tax component or cess.
    Certain types of insurance have the facility to have a discount on premia as 'No Claim' discount when you don't raise a claim under the policy.
    Customized policies like that tied to a bank's account etc may have lesser premia, but may also have lesser benefits an features.
    Insurance premiums can increase following certain policies by the government also.
    My personal feeling is that premium for insurance related to vehicles and Medical insurance can be expected to rise. They can rise along with the implementation f budget clauses, say April 1st or at any other date depending on court orders, IRDA sanction, etc.

    As it is purely a seller's market the helpless public does not have much choice and is at the mercy of the insurers.

  • Recently a survey has been conducted by one of the large Reinsurer which suggest that the reinsurance premium for the individual insurance business will be increased. Insurers are the risk owners of the Term insurance plan and hence they will determine the price with the insurance company and then it will be passed to the customer. The Reinsurer has sent notices to all the insurance companies that the price will be revised in 90 days. The Reinsurer revises rates of life insurers and these companies will be forced to end the price for customer.

    When Reinsurers increase their cost price, the insurance companies will take calls on insurance pricing either through profitability and price. Life Insurance companies mainly depend on Term Life Insurance which is the major source of profitability in the long run. This will become a big burden as the outcome is going to get the price increased for the customers. In the next 3 to 12 months there will be a correction happen in the premium rate with all the brands need to adjust with the new reality.
    The IRDAI has announced premium rates for private two-wheelers and car. According to the new rates the customer we will have to pay more for the two-wheelers and car third party liability insurance. There is a 21 per cent higher increase for two-wheelers with engine capacities between 150 and 350cc. The rates are hiked from 985 Rs to 1193 Rs. The vehicle owners will need to pay an extra 208 Rs this year. The third-party premium rates have been increased for private cars with engine capacity under 1000cc. The third-party cover has been increased from 1850 Rs to 2072 Rs. The customers need to pay an extra 222 Rs this year.

    "Earning knowledge is by sharing it with ISC and we will rectify our mistakes."

  • Yes. The insurance premium rates are going to increase from April 2020. If you want to take an insurance policy it is better you take before 1st April 2020.

    Presently the term policy rates are less. The premium amount will depend on your age and the sum assured. If you smoke and drink, the premium amount will be high. The term policy is that in case of any accidental death, the insurer's nominee will get the sum assured. The premium for these policies is going to be increased from 1st April 2020.

    Similarly, there will be an increase in another policy premium also. This for life insurance.

    Coming to general insurance the rates are already out and there is an increase for third party insurance also.

    drrao
    always confident

  • The insurance policies have been flouted to provide substantial reliefs in case unexpected medical expenses as a result of various health issues. Again there are different options run by LIC such as Akshaya Pension Plan. Endowment policies, Children Education Plan etc for which we are paying higher premium as compared to previous years.
    To name a few, ICICI prudential, SBI Life, United India Insurance, LIC of India have different options to suit the need of the insurers.
    Vechile and Car insurance has multiplied manifold of the National Insurance and others.
    The Insurance companies flout different surveys from the survey agencies to know the impact of the hikes of the different schemes. Considering the psycology of the insurers, further gear up for the revision of prices of the different policies.
    It is anticipated that the policies of Insurance Companies having policies of different nature will have the upward trend going as much as 20 percent from the existing one from 1 st April 2020.

  • Insurance premiums were fixed to increase from 1st April 2020 according to insurance agents and news and due to coronavirus pandemic the date was deferred to 10th April 2020.

    The re-insurer cost price has been increased for the insurance companies so it is impacting the premiums of term insurance plans cost.


  • Sign In to post your comments