Choosing the right life insurance plan is essential to secure your family's future. An increasing term life insurance policy offers growing coverage over time. This is ideal for individuals whose income and expenses are expected to rise. However, before you decide, it’s important to understand how the plan works and what to compare. Key features such as annual increase rate, premium structure, and rider options can make a big difference. Let's understand how to choose term insurance, what features to prioritise, and how to compare policies using crucial metrics like settlement ratios and exclusions. Whether you’re planning for long-term protection or looking to keep pace with inflation, this article will help you make an informed decision.
Life Cover Starting @ just ₹18/day*
Change Your Policy Term
As per your life stage and commitments
Hassle-Free Claim Settlement
99.38% Claim settlement ratio*
Smart Income Tax Savings
Save up to ₹54,600* on your taxes
How to Choose the Best Increasing Term Life Insurance Policy
Increasing term life insurance is a type of term insurance in which the sum assured rises over time. The increase happens either every year or at fixed stages. This type of plan helps protect your family against inflation and growing expenses, like school fees or home loans.
When it comes to how to choose term insurance, especially an increasing term policy, it’s important to evaluate the following factors:
Find out whether the amount of the sum assured goes up on an annual basis. A few policies give a 5–10% annual increment, but others give you the choice to pick the increment. Basically, your plan should reflect your own expectations and needs when it comes to income and expenses.
Many people ask, “Does term insurance premium increase every year?”
The premium stays fixed in regular term plans. In increasing term plans, it depends on the policy. Most policies have fixed premiums even when coverage increases, while others raise the premium as the coverage grows, but this is relatively uncommon. Thus, it is important to check with the insurer to understand how the premium and coverage will evolve over time.
Do not overlook the policy's maximum term and minimum age requirements. Selecting a longer term is better for younger people, and buying the insurance when you are young ensures you pay a lower premium.
Things like critical illness, accidental death benefit, and waiver of premium can be added as optional benefits. Though they require more money, they may be useful if they meet your needs.
The claim settlement ratio (CSR) is one of the most important criteria when choosing the best increasing term life insurance policy. This figure shows how many claims the insurer has settled compared to how many it received in a financial year.
A high CSR (above 95%) is a sign that the insurer is reliable. For your peace of mind, choose a provider with the best settlement ratio in term insurance.
Even with good intentions, buyers often make errors that reduce the effectiveness of their policy. Avoid these common pitfalls:
Always factor in inflation and rising expenses when selecting the sum assured.
Understand the premium pattern to avoid confusion. Not knowing this upfront can lead to surprises, especially if you're budgeting for long-term affordability.
The cheapest plan isn’t always the best. It’s important to look beyond price and consider the overall benefits and reliability of the plan. Always review the claim process and exclusions before making a decision.
Always read the policy document thoroughly to understand limitations and conditions.
To have the best increasing term life insurance, select a plan that can provide you with enough protection as your life changes. Don’t only look at the cost; check the claim settlement record and exclusions. Compare different term insurance options in India and find a policy that fits your financial goals and life stage.
1.7K Linkedin Followers 
Reviewed by Vaibhav Kumar Kaushik 
Acko Technology & Services Private Limited
#36/5, Hustlehub One East, Somasandrapalya, 27th Main Rd, Sector 2, HSR Layout, Bengaluru, Karnataka 560102
Products 
Company
Legal
Support
Car Insurance 
Bike Insurance
Health Insurance
Group Health Insurance
Travel Insurance
Life Insurance
