Will this be the next bombshell that the Capital Markets, Insurance and Savings Authority drops on Israel’s insurance companies? After intervening on premiums for vehicle insurance, the authority, headed by Amit Gal, now seeks to halt the special offers for signing up to life insurance, that is, insurance against the death of one member of a couple. The purpose of the insurance is to give money to a life partner or to children in the event of early death. If its move succeeds, the authority may seek to replicate it in other insurances, such as health.

The authority has issued a draft circular for public comment. Its provisions are expected to come into force in December. It stipulates that an insurance company that offers a discount on life insurance will not be able to cancel or reduce it after a few years, but will have to maintain the discount over the entire period of the insurance policy. The same applies to discounts given after the policy begins.

In other words, if you signed up to a life insurance policy at a discount of 20-30% on the premiums, or if you requested and received a discount subsequently, the insurance company will have to give you the discount in the following years as well. The reason is that low initial premiums are a means whereby the insurance companies attract customers, but after a few years the discount expires, and the premiums rise sharply.

The authority sees this as a consumerist failure. "Marketing of an insurance policy that frames the short-term discount appeals to the potential insured’s tendency to give preference to the present, and is therefore liable to divert him or her from making an informed decision that takes into account all the characteristics of the policy and its cost over the whole of the expected insurance period," it states.

In practice, that is how the insurance companies behave. They highlight the initial price, while the subsequent numbers are swallowed up in dense tables.

Although an insured person can make an approach to the company after the discount expires, or switch to a competitor, in reality as the years go by and the insured grows older, new medical conditions are liable to be discovered that prevent a switch. "In life insurance, there are barriers to transfers arising from the state of health of the insured, which is liable to deteriorate over time, restricting the ability to buy a new policy in place of the existing one, whether because the insured’s current condition makes it difficult to find cover, or whether because of the premium required. Cancellation of the discount is therefore liable to lead to disproportionate harm to the insured whose health condition has worsened, and who will be compelled to pay an uncompetitive price for insurance," the Capital Markets, Insurance and Savings Authority says.

Life insurance is a bet against death. The insurance company works on the basis of the law of large numbers. It bets that you will enjoy a long and good life (as happens in most cases), and you win if you die early.

It should be stressed that life insurance premiums rise in any case as the insured’s age rises. It is therefore not certain that it is worth continuing to pay for life insurance after the children have grown up and left home. At age 60 and over, the monthly cost of life insurance jumps to NIS 1,000 or more (or nearly NIS 2,000 monthly for a couple).

The industry’s actuarial data bring home how wide the gap can be between the starting price and the cost over the period of the policy. According to a report by the Capital Markets, Insurance and Savings Authority, the monthly premium for a life insurance policy for a 35 year-old man who doesn’t smoke giving cover of NIS 1 million for thirty years begins at NIS 65 (the figures are from 2024), but rises to NIS 110 or more at age 45 and to NIS 325 or more at age 55. The average monthly premium over the whole insurance period is NIS 276, and the total cost by age 65 is NIS 100,000.

A woman who doesn’t smoke will pay NIS 52 monthly at age 35. The premium will rise to an average of NIS 200 monthly over the period of the policy, and the total cost will be NIS 73,000.

A man who smokes will pay NIS 100 monthly at age 35, and an average of NIS 540 monthly over the period of the policy. The total cost will be NIS 196,000. For a woman who smokes, the initial policy will be NIS 77 monthly, the average will be NIS 392, and the total cost will be NIS 144,000.

Published by Globes, Israel business news - en.globes.co.il - on August 17, 2026.

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