- Term Insurance Premiums
- Factors Affecting it
- Life Long Security
Does Term Insurance Premium Increase Every Year?
People often need an answer about whether their term insurance premium increases every year. If you are also confused about the same then after reading this article all your doubts will be clear.
Yes, term insurance premiums slightly increase yearly due to rising inflation in the economy. You should buy it as early as possible to avoid the rising premiums. The sooner you purchase, the more affordable premiums you have to pay.
But once you purchase a term plan the premium gets locked in for a fixed policy tenure chosen by you at the time of buying the policy. By purchasing term insurance right away you can save a considerable amount of money. If you are planning to buy a term plan you should buy it right now.
Factors Affecting Your Term Insurance Premiums
The table illustrates the considerable factors that can affect your term insurance premium amount:
| Factors | How Does It Affect Term Insurance Premiums?d |
|---|---|
| Age | A young individual has low health risks so the insurance companies charge them a low premium, unlike senior citizens. |
| Gender | The average life expectancy of women in India is more than that of men. So, the term insurance policies are available for a longer tenure for women at affordable prices but the premiums will be increased as time passes. |
| Lifestyle & health conditions | Living a healthy lifestyle attracts a lower premium. A smoker or alcohol consumer policyholder can avail of all the benefits of a policy but at a higher premium cost. |
| Occupation | A high-risk job can be life-threatening making the policyholder’s life more prone to risk. Hence, the insurance companies charge you a high premium amount. |
| Sum assured | The chosen sum assured is directly proportional to your premium amount. It means a higher sum assured will cost you a higher premium. |
| Premium tenure | The timeframe you choose to pay your premium amount is called premium frequency. If you’ve chosen to pay until a specific time, the premium will be higher. But if your policy says to pay premiums regularly, then your premiums are affordable and you have to pay it regularly throughout the policy term. |
Ways to Avoid Increasing Term Insurance Premiums
Premiums on your term insurance can make you feel irritated or sometimes financially unstable. But you can avoid the increment of your premiums by following these simple steps:
Young Age
Buying a term insurance policy at a young age can help you cut down heavy premiums as insurance companies charge lower premiums when you are young.Longer policy tenure
A greater policy tenure can impact your monthly premiums as a large period lowers your premiums.Add riders
Add selective riders that you require to your policy to get maximum benefits. If you add unnecessary riders to your term insurance plan then the premium cost increases as every rider adds to the overall premiums.Comparison
Compare plans before buying it straight as it will give you an understanding of the plans that suit you the best.Maintain a healthy lifestyle.
To avail of lower premiums you must maintain a healthy lifestyle by avoiding smoking and alcohol habits.
Bottom Remarks
Buying a term insurance plan at a young age can help you save a considerable amount of money over a period of time. The insurers charge you lower premiums at a young age due to good health conditions. If you want to lower your premiums you should maintain a healthy lifestyle, avoid adding unnecessary riders, compare various plans, and choose the right plan.
You can get the maximum benefits from your term plan by purchasing the one that best fits your unique needs. PolicyX.com gives you the freedom to compare a tailored plan for the security of your loved ones. On top of that, we offer you prompt support whenever you need it. You can contact the insurance experts of PolicyX.com at 1800-420-0269.
Term Insurance Premiums : FAQ’S
1. How much does a premium increase per annum?
The yearly premium increase is dependent on the policy plan you’ve purchased. Or the sum insured by your policy provider influences the increase rate of your term plan.
2. What if I’m not able to afford increasing premiums at a later stage?
You can explore other policy types or the coverage amount/sum insured may be adjusted in this scenario.
3. What will happen if I miss paying an increased premium for my policy?
If you’re unable to pay your premiums even within the grace period (30 days for this instance), your term life policy will lapse. However, it depends upon the insurance providers, in how many days
4. How an increased premium on my term insurance policy may benefit me?
It can help you save taxes under Section 80C of the Income Tax Act, 1961. Eventually, the insured’s nominee will get the benefits of coverage amount tax-free.
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Written By: Himanshu Kumar
Himanshu is a seasoned content writer specializing in keeping readers engaged with the insurance industry, term and life insurance developments, etc. With an experience of 2 years in insurance and HR tech, Himanshu simplifies the insurance information and it is completely visible in his content pieces. He believes in making the content understandable to any common man.
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