|Nil - 01/06/2012
Source: The Financial Express
After lowering the cost structure for unit-linked insurance policies in 2010, Irda is now working on similar lines for traditional products. The regulator is especially focussed on the commission structure for agents. It is also working to simplify the traditional products so that policyholders understand them and are fully aware of what they are paying for. So, before buying an insurance product, the policyholder must understand the various charges that an insurance company levies on a product. The first and foremost component of the premium is mortality charges, or the charge that one has to pay for the risk cover. It is essentially the cost of the insurance cover and the charge will vary depending on age, health, tenure, coverage amount and even the occupation of the life assured. Most life insurance companies use the mortality table used by the LIC. The younger a person the lower will be the mortality charge. It will increase as one grows old. So, it is always advisable to take a life cover at a younger age, ideally immediately after getting the first job and pay lower mortality charges.