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Term Insurance Price Index

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

Broader Vision

Continuing with the trend of rising prices, the Term Insurance Price Index has increased further by 4.85% from the 3rd Quarter of 2023. Simultaneously, the difference spotted in the Term Insurance index value was 13.02% between Quarter 4, 2023, and Quarter 4, 2022. Overall the index has increased by a significant 46.62% since the PolicyX.com insurance price index was launched in Q4, 2020. This increase is a result of an increase in prices by most of the re-insurers in the country due to the increasing death claims.

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 a 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, 2023 Term Insurance Price Index observed that the non-smoker 25-year-old female paid an average premium price of INR 6,459 and the smoker female paid an average premium price of INR 10,780 for INR 50 Lakh sum assured cover. Likewise, the non-smoker 25-year-old male paid an average premium price of INR 7,189 and the smoker male paid an average premium price of INR 12,223 for INR 50 Lakh 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 16,458 16,334
Male 16,582 30,510 10,889 19,382 19,341
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 28,283 29,408

*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.

Premium Revision- Insurers

Premium Revision- Insurers

Premium Revision- Insurers

The overall cost of term insurance increased by 4.85% in comparison to the previous quarter (Q3, 2023). However, this upward trend was not uniform among all insurance companies, with three insurers experiencing price increases and two insurers implementing price reductions, as illustrated in the accompanying graph.

Premium Price Variation- Age

Delaying a purchase of a term policy by 10 years could cost on average 53.96% higher premiums for a 25-year-old, 75.60% higher for a 35-year-old, and 81.63% higher for a 45-year-old.

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 53.96%
35-45 75.60%
45-55 81.63%
Average Premium Price Age
Average Premium Prices Gender

Premium Price Difference- Gender

Average Premium Prices Gender

As per the actuarial science, the male audience carries a higher risk of life than the female audience. Thus, the Term Insurance Price Index Quarter 4, 2023 observed a premium variation of 20.68% 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

Smoking causes a significant difference in term insurance premiums unlike in health insurance.

Along Premium Smokers & Non-Smokers

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

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 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 March 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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