?w=75&resize=75 75w, data:image/svg xml,?w=100&resize=100 100w, data:image/svg xml,?w=150&resize=150 150w, data:image/svg xml,?w=240&resize=240 240w, data:image/svg xml,?w=320&resize=320 320w, data:image/svg xml,?w=500&resize=500 500w, data:image/svg xml,?w=640&resize=640 640w, data:image/svg xml,?w=800&resize=800 800w, data:image/svg xml,?w=1024&resize=1024 1024w, data:image/svg xml,?w=1280&resize=1280 1280w, data:image/svg xml,?w=1600&resize=1600 1600w" data-src="data:image/svg xml," data-ezsrcset="https://www.liveinsurancenews.com/wp-content/uploads/2010/12/flag-of-india-400-wide.jpg 400w,https://www.liveinsurancenews.com/wp-content/uploads/2010/12/flag-of-india-400-wide-300x264.jpg 300w,https://www.liveinsurancenews.com/wp-content/uploads/2010/12/flag-of-india-400-wide-150x132.jpg 150w" sizes="(max-width: 284px) 100vw, 284px" width="284" ezimgfmt="rs rscb4 src ng ngcb4 srcset" data-ezsrc="https://www.liveinsurancenews.com/wp-content/uploads/2010/12/flag-of-india-400-wide.jpg"/>Insurers in India have seen an increase in the number of policies that have been allowed to expire.
Recent data released by the Insurance Regulatory and Development Authority (IRDA) in India revealed that life insurance companies are experiencing a trend of increasing policy lapses and forfeitures throughout the past fiscal year.
This information was disclosed in the authority’s annual report for the most recent fiscal year.
Likewise, the Life insurance Corporation of India (LIC), a public sector insurer, revealed that it experienced a 5% lapse rate in the most recent fiscal year. On the other hand, the report of twenty-three insurers in this sector shows an average lapse rate of 24%.
This is a notable increase from the lapse ratio observed by life insurance companies last year.
The previous year, the LIC the lapse rate was 4.9 percent. In the same way, the private sector said that its average lapse rate had been 22.2 percent. This number represents the total percentage of life insurance policies that can expire before reaching maturity.
A policy is considered to be lapsed if the client does not make the payment of life insurance premiums within the grace period stated in the terms of this agreement.
According to the Managing Director and Managing Director of IDIBI Federal Life Insurance, GV Nageswara Rao, “The main reasons for lapsing unrelated business may include an insured’s lack of liquidity, in which case he chooses to lapse the policy before the policy lapses. ‘deadline. Another reason could be the mismatch between the policyholder’s requirement and the actual policy, in which case he may forgo the benefits of the sum insured.
This is a trend observed the previous year in the life insurance sector too. In 2010, the lapse rate for LIC was 4 percent. However, the past two years have shown considerable improvement in the private sector, with insurers reporting a 30.2 percent lapse rate that year. This shows that the trend is inconsistent in the public and private sectors when examined over several years.