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Term Insurance Price Index

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

Broader Vision

The Term Insurance Price Index has increased by 1.38% from the previous Quarter 1, 2023.

Simultaneously, the difference spotted in the Term Insurance index value was 6.77% between Quarter 2, 2023, and Quarter 2, 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 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 2, 2023 Term Insurance Price Index observed that the non-smoker 25-year-old female paid an average premium price of INR 6,231, and the smoker female paid an average premium price of INR 9,692 for INR 50 Lakh sum assured cover. Likewise, the non-smoker 25-year-old Male paid an average premium price of INR 6,793 and the smoker male paid an average premium price of INR 10,900 for INR 50 Lakh sum assured cover.

Age Gender 1 Cr 50 Lac Average Premium
Non-Smoker Smoker Non-Smoker Smoker
25 Female 9,793 15,498 6,231 9,692 10,304
Male 10,982 17,364 6,973 10,900 11,555
35 Female 14,307 22,489 8,917 13,712 14,856
Male 17,065 26,810 10,524 16,231 17,658
45 Female 24,108 37,642 14,864 22,900 24,879
Male 29,937 47,434 18,421 28,839 31,158
55 Female 47,620 74,786 26,686 41,469 47,641
Male 57,543 92,779 31,992 51,240 58,389
Avg Premium 26,419 41,850 15,576 24,373 27,055

*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

The cost of term insurance, on the whole, rose by 1.38% compared to the last quarter (Q1, 2023). However, this increase wasn't consistent among all companies. Notably, Insurer 5 implemented a significant price hike of 6.8% while all others kept the prices constant.

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 Second Quarter. Delaying a purchase of a term policy by 10 years could cost on an average 48.75% higher premium for a 25-year-old, 72.35% higher for a 35-year-old, and 89.21% higher for a 45-year-old. There is 1.56 % change in Q2 2023 from the previous quarter (i.e., Q1 2023).

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 48.75%
35-45 72.35%
45-55 89.21%
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 2, 2023 observed a premium variation of 21.58% 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 2, 2023, 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 59.61% higher premium when covered for 1 Crore 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 September 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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