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Term Insurance Price Index
Analysis and Insights from Pricing of Term Insurance
from leading insurance companies in India.
Analysis and Insights from Pricing of Term Insurance
from leading insurance companies in India.
The term insurance price index in the 1st Quarter of 2024 has remained unaffected when compared to the Quarter 4 of 2023. However, this steadiness is not ascertained as in the Q3 and Q4 of 2023, there was a rise in the cost of term insurance premiums by 4.67%. If we look at the bigger picture, and take into consideration the Q4 of 2020 to Q1 of 2024, there has been a significant surge of a whopping 46.38%. This hike in the term insurance prices can be due to the rising death claims in the last 4 years. This makes it crucial to consider the rising costs while planning to purchase a term insurance plan and therefore, buying early and for longer term.
Term insurance premiums keep on fluctuating due to a highly competitive market, huge demands, and a rise in mortality rate.
The term insurance price index shows average premium prices provided by the top 5 life insurance companies in India. These show that the average premiums for a non-smoking, 25 year old female, who opted for a sum assured of INR 50 lakhs are INR 6,459. On the other hand, smoking females with the same conditions paid INR 10,780 on an annual basis.Similarly, non-smoking 25-year-old males paid an average premium of INR 7,189, whereas smoking males paid an average of INR 12,223 for the same sum assured cover.
| Age | Gender | 1 Cr | 50 Lac | Average Premium | ||
| Non-Smoker | Smoker | Non-Smoker | Smoker | |||
| 25 | Female | 9,543 | 16,673 | 6,459 | 10,780 | 10,864 |
| Male | 10,870 | 18,950 | 7,189 | 12,223 | 12,308 | |
| 35 | Female | 14,141 | 25,402 | 9,334 | 15,807 | 16,171 |
| Male | 16,582 | 30,510 | 10,889 | 18,457 | 19,109 | |
| 45 | Female | 24,566 | 43,169 | 15,662 | 26,818 | 27,554 |
| Male | 31,625 | 54,125 | 20,564 | 34,042 | 35,089 | |
| 55 | Female | 47,559 | 82,955 | 28,404 | 48,522 | 51,860 |
| Male | 57,269 | 98,423 | 33,944 | 58,038 | 61,918 | |
| Avg Premium | 26,519 | 46,276 | 16,556 | 28,086 | 29,359 | |
*Source: Average prices have been determined from the leading 5 Term insurance companies in India. These prices are for illustration purposes & the actual price may vary depending on the insurer, age, gender, health condition, Sum Assured, and coverage type.
Disclaimer: Premium rates have been revised for policies exceeding 2 crore in a few life insurance companies.
The term insurance price index for Quarter 1, 2024 shows that there was no increase in the term insurance premiums when compared to the Q4 of 2023. This can be considered a good time to purchase a term insurance policy as the prices are consistent since the last quarter of 2023, before they show a surge again. It is advised to purchase a term insurance plan at an early age as the premiums are comparatively lower. A high sum assured plan at an early age will cost less as compared to the same plan when bought at the later stage of life.
Delaying a purchase of a term policy by 10 years could cost on average 52.26% higher premiums for a 25-year-old, 77.56% higher for a 35-year-old, and 81.63% higher for a 45-year-old.
Following are the shifts observed in premiums payable at a difference of 10 years:-
| Age Brackets | % Change in premium prices |
| 25-35 | 52.26% |
| 35-45 | 77.56% |
| 45-55 | 81.63% |
According to actuarial science principles, there exists a discernible difference in life risk between male and female demographics. Reflecting this, the Term Insurance Price Index for Quarter 1 of 2024 reveals a notable premium disparity of 20.64% based on gender. Specifically, males tend to face higher term insurance premiums compared to their female counterparts.
If you require the best term plan, you need the help of a term insurance premium calculator. Use PolicyX.com's term insurance calculator to look at the average premium for your age and gender.
Calculate NowSmoking causes a significant difference in term insurance premiums unlike in health insurance.
In terms of habits, a male smoker pays a 73.63% higher premium as compared to a non-smoking person for a 1 crore cover. This difference is almost similar for a female-insured
The prices and charts displayed above are based on the average premium prices of the top 5 life insurance companies in India in terms of their GWP. The companies considered in our analyses are Tata AIA Life, HDFC Life, ICICI Prudential, Max Life, and Bajaj Allianz Life.
The prices represent the average annual premium payable (as of the quarter ended June 2024) against a sample profile based on age, gender, and smoking status. In addition, the analyses also factor in the sum assured and the policy type (Term Insurance) for a comprehensive evaluation. It is important to note that the insurer's individual rate may vary depending on age, gender, health profile, sum assured & coverage type.
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