Do life insurance policies change when interest rates rise? The basics of assumed interest rates and 5 things to check before reviewing your policy

This article is based on reports as of November 3, 2026. Conditions are subject to change.

Life insurance companies plan to offer products with higher assumed interest rates

According to an NHK report (published October 26, 2026), as the trend of rising long-term interest rates continues, life insurance companies are planning to replace their government bond holdings and increase the proportion of higher-yield bonds. By increasing investment returns, they intend to offer insurance products with higher assumed interest rates.

As far as can be confirmed, specific interest rate figures or details on which companies will offer them and when have not been disclosed. Therefore, this article organizes what you can check yourself before reviewing your policy, based on the premise that products may change.

What is an assumed interest rate?

• The interest rate that an insurance company expects to earn when investing the premiums it receives

• The higher the expected investment return, the lower the insurance premiums will be

• Determined by each insurance company with reference to the standard interest rate set by the Financial Services Agency

• The assumed interest rate at the time of contract is fixed for that contract (even if the assumed interest rate changes later, the premiums for an already signed contract will not change)

In other words, even if new products with higher assumed interest rates are released, the conditions of your current insurance policy will not automatically improve.

5 things to check before reviewing your policy

• Assumed interest rate of your current contract: Older contracts may have higher assumed interest rates, and in terms of savings, it may be more advantageous to keep your current policy. Check your policy documents or terms and conditions.

• Surrender value: If the elapsed time is short, the amount may be less than the total premiums paid (resulting in a loss of principal). Check the timing if you intend to cancel.

• Order of cancellation: If you cancel before the new contract is finalized, there is a risk of having a period without insurance coverage. Cancel only after the new contract is finalized.

• Disclosure and screening: There is a process for disclosing health status and undergoing screening, so you are not guaranteed to be accepted into your desired insurance policy.

• Premiums based on age: Insurance premiums tend to increase as you get older. Estimate the cost burden after the review as well.

How to proceed with comparisons

• Create a list of your current total premiums and coverage details.

• Compare new products by aligning the premiums, coverage, and surrender value (return rate).

• Verify the figures using brochures, terms and conditions, and other materials from each company.

• Do not rush; compare multiple products before making a decision

Insurance involves large sums of money and long-term contracts. Rather than deciding to switch just because ‘interest rates are supposedly rising,’ it is safer to check the terms of your current contract before considering any changes.

Summary

• Life insurance companies plan to increase holdings of high-yield government bonds and release products with higher assumed interest rates (NHK report; specific figures unconfirmed)

• Assumed interest rates are fixed at the time of contract. The terms of existing contracts do not change automatically

• Before reviewing, check the assumed interest rate, surrender value, order of cancellation, health disclosures, and premiums based on age

For individual insurance selection, please consult company materials or a professional (such as a financial planner).

Sources: NHK report (published October 26, 2026, regarding the government bond investment policies of life insurance companies), MUFG Bank ‘Insurance Review’ explanatory page. This is a summary and reconstruction of the original articles; figures are as stated in each source.
A detailed explanation with a comparison table is available on the blog.