Rising interest rates, home loan and fixed deposit rates are deterring investors from buying large life insurance policies. Or at least discouraging them from paying large premiums for their policies.
According to insurance industry experts, although investors are buying life insurance, they seem to be deferring their spends on the products, allocating only small amounts to their insurance policies.
At present, bank fixed deposit rates are looking more attractive at around 9% compared to 6.5-7% last year at the same time. Even monthly payments towards home loans (EMIs) have gone up, increasing the financial burden on families. This time last year floating home loan interest rates ranged between 8.75%-9%.
Currently they hover around 10%-12%. To top this, experts say that the new antimoney laundering guidelines have largely affected the single premium business as well as investors buying large-ticket policies. The guidelines require the company to gather detailed information about the person buying insurance if the premium amount exceeds a certain amount.
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