In today’s times, insurance is a household name. People of all age groups, including children to old people, are covered under insurance cover under various schemes offered by insurance providers. It plays a vital role is a case of an emergency. Different types of insurance are available according to the needs of the individual. Similarly, term insurance is also a form of insurance.
What is term insurance?
Term insurance is a type of life insurance policy that provides coverage at a fixed payment rate for a limited period. If the insured dies during the policy term, the death benefit amount is payable to the nominee. It is intended to provide protection to the family in the event of uncertainty or death.
What are the premiums for term insurance?
Term insurance policy has the lowest premium as compared to other types of life insurance. The premium is lower because there is no investment component and the premium amount is used to cover the risk. There is no maturity benefit after the expiry of the policy. On the death of the policyholder, the survivor will get the policy amount.
When to buy term insurance?
At the age of 30, it is best to buy term insurance. At this age, the person becomes a responsible adult. At the age of thirty, you are healthy, you have a good salary job and your financial condition is also good. You are either planning to get married or you have recently started a family. You are planning to buy or build a house.
Therefore, after knowing benefits of the term insurance policy every person must buy term insurance. Since the demand for term insurance is high, companies keep increasing its premium. In the coming days, companies are going to make term insurance expensive again. Therefore, this is the right time to buy term insurance.
Reinsurance companies can increase their rate
According to a report in the Economic Times, life insurance companies are preparing to increase the premium for term plans. The reason behind this is being told that many reinsurance companies have increased their rates. Re-insurance companies insure the risk of insurance companies. Reinsurance companies have increased their rates at a time when life insurance companies are facing higher martiality claims due to Covid.
The cost of insurance companies is increasing
Reinsurance rates for Indian insurance companies were rising even before the Corona pandemic. Global underwriters had raised concerns about low rates in the Indian market. Since this increase occurred during the pandemic. Some reinsurance firms had changed rates earlier this financial year. While some companies are thinking about changing the rate. The rates of reinsurance companies are based on expectancy. This is a long-term trend. But this time, reinsurance companies have decided to increase their rates during the Corona pandemic.