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