According to Indraneel Chatterjee, Co-Founder, RenewBuy Insurance, the renewed contracts of term policies need to be approved by the Insurance Regulatory Development Authority of India (IRDAI) and are expected to get implemented in the next few days. This means that consumers still have the window to buy term insurance policy at lower rates and can save 10-15 percent increase in premiums before the revised rates get implemented.
According to Inderaneel Chatterjee, Co-Founder and Principal Officer, RenewBuy, "The premium for the standard product appears relatively high because the other terms plans cater to individuals usually in higher income brackets, for whom insurers will be in a position to absorb the underwriting costs and risks, given the higher coverage." The minimum coverage offered by most term policies in the market is over 25 lakh, whereas, for the standard products, the maximum coverage is itself only 25 lakh. For instance, in SBI Life's eShield plan, the minimum cover is 35 lakh, with no limit of maximum cover.
Above, we said that if your current expense is Rs 10 lakh a year, you should aim for a retirement corpus of Rs 3 crore by 60. Suppose you are 40 and have a corpus of Rs 1 crore. Then you should have life insurance worth Rs 2 crore to cover the shortfall. Alternatively, buy life insurance equal to 15-20 times your annual salary and reduce it as you move closer to retirement. "As age increases, the number of years of work-life that a person can lose due to untimely death reduces," says Indraneel Chatterjee, co-founder and principal officer, Renewbuy.com.
Term insurance plans are the simplest form of insurance in which the beneficiaries of the policy receive the sum assured in case of the demise of the policyholder during the tenure of the policy. Unlike endowment plans and ULIPs, there are no survival or maturity benefits under this policy.
Did you know that there is a difference between an insurer cancelling a policy and choosing not to renew it? Cancellation means termination of the policy. It can be done either by the insurer or the insured before the end of the policy period. However, the non-renewal case arises after a policy has served a period of a year or so. Here, it is up to the insured or the insurer to decide whether the policy could be renewed or not while it expires.
Premiums for term insurance plans are likely to increase between the range of 10 per cent to 15 per cent soon. While some insurers have already increased the premiums in recent months, some others are expected to follow suit by April 2021.
Technology is playing a vital role in disrupting the insurance industry in India and is helping create differentiation in consumer experience and service as well as enhancing geographical access, especially to smaller towns and rural India. Using technology, RenewBuy Insurance is simplifying and digitising motor, life and health insurance. Balachander Sekhar, CEO, RenewBuy tells Telangana Today, the future insurance offerings and major trends in the sector.
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