When buying life insurance, many people focus on level term plans because of their predictable costs. However, a type of term insurance, increasing term life insurance, is gaining popularity, especially among individuals aiming to maintain financial protection in line with inflationary trends. A key aspect of these plans is the concept of increasing term life insurance premiums. For those asking, “Can I increase my term life insurance policy?”, this article explains the structure and implications of increasing term insurance. Let’s understand how increasing term plan premiums work, when and why they rise, and what you should know before choosing an increasing term policy.
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Premiums in Increasing Term Life Insurance | How They Work
Increasing term insurance is a type of term insurance plan that increases the base sum assured by a certain amount (percentage) once a year. This is structured to gradually increase the sum assured over time, often in response to inflation or future liabilities. Typically, the premium for an increasing term plan will be higher than that of a standard term plan (non-increasing). However, it gives the policyholder the ability to increase the coverage without the need to apply for a new policy or undergo additional underwriting, depending on policy terms. An increasing term plan is a good option for anyone wanting to ensure their insurance coverage is keeping pace with their changing financial needs.
When buying a policy, the first coverage amount is set. The sum assured generally increases annually at a fixed percentage, usually between 5% and 10%, depending on policy terms. This is a unique feature of increasing term insurance; in turn, these increments typically result in higher premiums, aligned with increased coverage.
Before diving into premiums, let’s look at why an individual might choose this type of term insurance:
Let’s break down how increasing term life insurance premiums generally function.
In this model, you pay the same premium every year, but your coverage increases.
Keep in mind that some insurers may offer variants where premiums also increase over time, though this is less common. That’s why it’s important to go through the policy details carefully, so you know exactly how your premiums are structured and what to expect down the line.
Some policies allow you to choose how much the sum assured grows, e.g., by 5%, 10% etc., annually. Premium increases will vary based on that choice. So if you’re wondering, “How much does term life insurance increase?”, it depends on the chosen increment.
This type of plan suits young professionals with extended income-generating years, individuals expecting major life changes such as marriage, children, or home loans, and anyone concerned about inflation and maintaining the value of their death benefit over time.
An increasing term insurance plan is a type of term life insurance where the sum assured (life cover) increases automatically over time, typically by a fixed percentage each year. Selecting the appropriate plan at the outset can help address future protection needs. Such plans may be suitable where protection needs are expected to rise over time.
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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
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