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Premium increased 32% after underwriting

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04 May, 2021 by  ashok T

Hello,


is it normal to have the term insurance premium increasing by 33% after underwriting process? Please note I have submitted complete medical tests and also I have minor condition if asthma and bp. 33 year old.

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05 May, 2021

Insurance premium is calculated for standard life which has a common probability of death . However in case , any life has increased probability due to some adverse information then such lives are called sub standard .

Insurance companies increase rates of premium for such sub standard life . As you are suffering from Asthama and BP hence you are categorized as sub standard life and extra premium has been charged from you .

Underwriter in an insurance company assess each case and rate up premium on the basis of material facts which affects the probability of occurence of event .

Lastly , 90 % lives are standard hence it is not common to rate up premium .

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05 May, 2021
ashok T
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06 May, 2021

Hi Ashok,

Hope you are doing well and safe! It is very subjective for us to comment on the surge of '32%' in your premium amount. You should understand that each life insurance company follows its own unique underwriting guidelines and the premium loadings (i.e. increase in premium), issuance, rejection, etc. of any policy are based on a multitude of factors based on that particular insurance company's risk-taking capacity. This means that your premium loading would be different for different insurance companies.

Hope this helps.

Thanks!


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06 May, 2021

Hi Ashok,


Shailesh & Ayush have already explained the process of underwriting & underlying reasons for premium rate up.


Yes, it's fairly normal for premium to be rated up by 30% for two pre-existing medical conditions that are chronic in nature - Hypertension & Asthma in your case. I have seen premiums rated up to about 100% of initial premium deposit in some cases.


To be sure, you can login a parallel term insurance application with another Insurer & understand their premium rate up. Meanwhile, keep the counter offer of your 1st Insurer in abeyance (check how much time they have given you to respond). Compare the 2 options and decide.


Hope this is helpful.


Asad Akbar



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