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Term Insurance Price Index

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

The Broader Picture

Overall Picture

Term Insurance prices witness surge in Q1 2021

The index value changed to Rs. 21,913 which is 4.4% higher than the previous quarter. Previously, the average price for a Rs. 50 lac sum assured was Rs. 14,839 and for a Rs. 1 crore sum assured was Rs. 27,150. This has now increased to Rs. 15,553 for 50 lac and Rs. 28,274 for 1 crore sum assured. This is an average price for various age groups i.e, 25 years, 35 years, 45 years, and 55 years and both genders. It also considers the prices for both smokers and non-smokers.

Overall Picture
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Q4 2020 vs Q1 2021

Significant Shift in Q1 2021

Q4 2020 vs Q1 2021

In the latest quarter of 2021, the premium prices have witnessed a similar fashion of growth across all age groups. Female in the age group witnessed highest average increase of 5.4% and male in the age group of 25 witnessed the lowest increase of 3.6%.

Segment Wise Category

50 Lac 1 Cr Average Premium
Age Gender Non-Smoker Smoker Non-Smoker Smoker
25 Female 5339 7401 8905 12654 8575
Male 5936 8412 10053 14580 9745
35 Female 7244 10492 12430 18404 12143
Male 8439 12514 14718 22275 14486
45 Female 11628 17599 20677 31902 20452
Male 14137 21685 25372 39638 25208
55 Female 20098 33225 37375 62027 38181
Male 24251 40442 45479 75896 46517
Average 12134 18971 21876 34672 21913

The mentioned premium prices are average premium prices from the top 10 insurance companies. A non-smoker 25-year-old female pays an average of Rs. 5,339 for a Rs. 50 lac cover and Rs. 8,905 for a Rs. 1 cr cover annually. As is evident from the table, the premium increase is not linear. As the sum assured increases, most companies provide a high sum assured discount, hence, the premium for a Rs. 1 cr sum assured is lower than twice the premium for a Rs. 50 lac sum assured.

*Source: Average prices in above tabular data are determined from leading 10 Term insurance companies in india. These prices are for illustration purposes & actual price may vary depending on insurer, age, gender, health condition, Sum assured & Coverage type.

50 Lac 1 Cr Average Premium
Age Gender Non-Smoker Smoker Non-Smoker Smoker
25 Female 5339 7401 8905 12654 8575
Male 5936 8412 10053 14580 9745
35 Female 7244 10492 12430 18404 12143
Male 8439 12514 14718 22275 14486
45 Female 11628 17599 20677 31902 20452
Male 14137 21685 25372 39638 25208
55 Female 20098 33225 37375 62027 38181
Male 24251 40442 45479 75896 46517
Average 12134 18971 21876 34672 21913
Insurer Wise Average Premium

Insurer Wise Average Premium

Insurer Wise Average Premium

In Quarter 1 2021, four insurance companies have escalated their premium prices out of 10. The highest jump observed in premium prices is about 19.0%, which is followed by 18.7%, 5.5% and the minimum is 2.6%, where else, other six insurance companies kept their premium prices same as last quarter.

Average Premium Prices By Age

Average Premium Price Age

Delaying a term plan purchase costs dearly

Premium prices increase exponentially as we age. Delaying a term plan purchase by 10 years costs on an average 45% higher for a 25-year-old and 71% higher for a 35-year-old. People above the age of 55 are paying the highest amount, which is 4.5 times more than what a 25-year-old is paying. Therefore it is always better to enter into a term plan early and lock in the prices. Typically, people cover themselves up to the age of retirement.

Following are the shifts observed in premium age in every ten years :-

Age Brackets % Change in premium prices
25 to 35 45%
35 to 45 71%
45 to 55 86%
Average Premium Price Age
Average Premium Prices Gender

Average Premium Prices By Gender

Average Premium Prices Gender

Insurance companies perceive the male insured risk to be higher than females. The average cost of male insured is 21% higher than female insured for a term plan. Based on the mortality rates observed by the World Health Organization, male mortality rates are higher than females across all countries since the last few decades.

Source: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6345642/

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Along Premium Smokers & Non-Smokers

Average Premium For Smokers & Non-Smokers

Along Premium Smokers & Non-Smokers

Along with your age & gender, habits also affect the price of your premium. On average, male smokers pay 59% more than non-smokers. Female smokers pay 57% more than non-smokers.

The highest impact is observed for both 55-year-old males & females with a 67% increase in the male category and 66% in the female category in their regular premium prices for being smokers. The least affected age group was 25 years old female who observed a hike of 41% in their respective premium prices for being smokers.

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Index Computation Methodology

The prices & charts displayed above are based on the average premium prices of the top 10 life insurance companies in India in terms of their GWP as per IRDAI Nov 2020 report. (LIC of India, SBI Life, HDFC Life, ICICI Prudential, Max Life, Bajaj Allianz Life, Aditya Birla Sun Life, Kotak Mahindra Life, Tata AIA Life, and Canara HSBC OBC Life).

The Prices represent the annual premium for each sample customer (age & gender) with their habits (smoker & non-smoker) and policy type (term & sum assured) as of January 01, 2020. The insurer individual rate may vary depending on age, gender, health profile, sum assured & coverage type.

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