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Term Insurance Price Index

Analysis and Insights from Pricing of Term Insurance
from leading insurance companies in India.

Broader Vision

Overall Picture

The Term Insurance Price Index has remained the same from the previous Quarter 3, 2022.

Simultaneously, the difference spotted in the Term Insurance index value was 8.73% between Quarter 4, 2021, and Quarter 4, 2022.

Overall Picture
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Average Premium Price- Sum Assured

Term Insurance Prices, being highly vulnerable to external factors such as competition, mortality rate, and demand, often lead to the change in the average premium prices. The premiums indicated in the illustration are the average premium prices taken from the top 5 life insurance companies.

The Quarter 4, 2022 Term Insurance Price Index observed that the non-smoker 25-year-old female paid an average premium price of INR 6,026 and smoker female paid an average premium price of INR 8,711 for INR 50 Lakh sum assured cover. Likewise, the non-smoker 25-year-old Male paid an average premium price of INR 6,671 and the smoker male paid an average premium price of INR 9,735 for INR 50 Lakh sum assured cover.

Age Gender 1 Cr 50 Lac Average Premium
Non-Smoker Smoker Non-Smoker Smoker
25 Female 10216 14724 6026 8711 9919
Male 11440 16549 6671 9735 11099
35 Female 14615 21333 8607 12471 14256
Male 17397 25592 10131 14799 16980
45 Female 24952 37414 14410 21485 24565
Male 30782 46472 17651 26550 30364
55 Female 46720 71467 25426 38829 45611
Male 56606 87055 30673 47104 55359
Avg Premium 26591 40076 14949 22461 26019

*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 & Coverage type.

Premium Revision- Insurers

Premium Revision- Insurers

Premium Revision- Insurers

All 5 companies forming the part of the index have shown an increase compared to the same quarter last year (i.e., Quarter 4, 2021). The increase in prices ranges from 5% at the minimum to 19.5% at the maximum resulting in an increase of 13.28% on an average.

Premium Price Variation- Age

Analyzing on the basis of the age factor, the Term Insurance premium price variation widened with the increasing age of an individual in the Fourth Quarter. Delaying a purchase of a term policy by 10 years could cost on an average 48.6% higher for a 25-year-old, 75.8% higher for a 35-year-old, and 83.8% higher for a 45-year-old. There is no change in Q4 2022 from previous quarter (i.e., Q3 2022)

Average Premium Price Age

Following are the shifts observed in premiums payable at a difference of 10 years:-

Age Brackets % Change in premium prices
25-35 48.62%
35-45 75.85%
45-55 83.82%
Average Premium Price Age
Average Premium Prices Gender

Premium Price Difference- Gender

Average Premium Prices Gender

As per the insurance norms, the male audience carries a higher risk of life than the female audience. Thus, the Term Insurance Price Index Quarter 4, 2022 observed a premium variation of 20.6% in terms of gender. The male category seems to pay higher term insurance premium prices vis-a-vis the female category.

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Along Premium Smokers & Non-Smokers

Premium Price Payable- Habits

Another remarkable factor to cast an impact on the Term Insurance Premium price is the smoking habit of an individual. In Quarter 4, 2022, the smoking habit has laid a larger effect in the higher age group categories of both, male & female categories.

Along Premium Smokers & Non-Smokers

In terms of habits, a male smoker pays 51.15% higher premium when covered for 1cr as compared to a non-smoking person.

Index Computation Methodology

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 Kotak Life Insurance, HDFC Life, ICICI Prudential, Max Life, and Bajaj Allianz Life.

The prices represent the average annual premium payable (as of the quarter ended March, 2023) 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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