Nippon Life Insurance Co will cut premiums for life insurance products by up to 20 percent as its payout is on the decline due to rising longevity of policy holders, company officials said Thursday.
On the back of people's longer life spans, other Japanese insurers also plan to lower mortality insurance fees. Sony Life Insurance Co will cut premiums for its mainstay products by 14.6 percent for 30-year-old men and 3.7 percent for women of the same age.
As for Nippon Life, its discounts will be effective for contracts signed in April or later. All the changes will be made after the industry's benchmark table containing mortality rates and average life expectancies was revised for the first time in 11 years.
For fiscal 2018 and beyond, the table, used by each insurer to design products, shows improved mortality rates at every age bracket. The mortality rate, or the number of deaths per 1,000 individuals per year, for instance, for 40-year-old men fell from 1.48 to 1.18, while the rate for women of the same age was down from 0.98 to 0.88.
The degree of a cut in insurance fees will vary depending on policyholders' age, sex and type of contracts.
Meiji Yasuda Life Insurance Co will also discount premiums for collective life insurance contracts by up to 24 percent from April. Other insurers planning similar premium cuts include Tokio Marine & Nichido Life Insurance Co, Mitsui Sumitomo Aioi Life Insurance Co and Sompo Japan Nipponkoa Himawari Life Insurance Inc.
While a rise in longevity has prompted them to reduce premiums for life insurance, they are expected to pay more for health insurance as more elderly people are likely to make claims for medical expenses, industry observers said.
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