Why are term insurance premiums charged by life insurers so widely different?
Vineet Kapoor, Faridabad
Premium rates offered by insurers are dependent on their reinsurer arrangements, profitability expectations, operating and selling costs and assessment of risk. The insurer’s business strategy also makes a difference because some insurers proactively recommend term insurance as a lead product whereas others don’t. Term insurance exclusions are standard across all insurers. The only exclusion allowed by the regulator in term insurance is suicide for the first year. You don’t have to worry about exclusions under life insurance. Some insurers have started to give in-built additional covers. For example, one insurer offers early sum assured payment in case the insured is diagnosed with a terminal illness. These add-ons make a difference to the premium amount.
