
Increasing term life insurance can be a smart move for anyone looking to boost their coverage. You can increase your term life insurance policy at any time, as long as your health hasn't changed significantly.
Term life insurance policies typically have a set period of time, usually 10 to 30 years, during which you're covered. If you want to increase your coverage, you'll need to reapply for a new policy.
Increasing your term life insurance policy can be a straightforward process, but it's essential to understand the implications of doing so. You'll need to consider the cost of the increased coverage, as well as any potential changes to your overall policy.
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What is Term Life Insurance?
Term life insurance is a type of life insurance that provides coverage for a specified period of time, usually ranging from 10 to 30 years.
This policy pays a death benefit to your beneficiaries if you pass away during the term of the policy, but it does not accumulate any cash value.
The main advantage of term life insurance is that it's generally more affordable than permanent life insurance, with premiums often 5-7 times lower.
Term life insurance can be tailored to fit your needs, with options for renewable, convertible, or level term policies.
In a level term policy, the premium remains the same for the entire term, providing predictable costs for you and your family.
A renewable term policy allows you to renew your coverage at the end of the term, usually with an increase in premium, while a convertible policy can be converted to a permanent policy without a medical exam.
If this caught your attention, see: Why Buy Permanent Life Insurance
Advantages and Disadvantages
Increasing term life insurance can be a valuable option for those who want to ensure their loved ones are protected against inflation and future expenses.
Protection against inflation is one of the key advantages of increasing term insurance, as it ensures your death benefit increases over time to keep pace with rising costs.
Here are some of the key pros and cons of increasing term insurance:
- Protection against inflation
- Potential for coverage without additional underwriting
- Covers future expenses, such as buying a home or having children
However, it's worth noting that increasing term insurance can be more expensive than level term insurance, and premiums can fluctuate.
Advantages
Increasing term life insurance offers several advantages. One of the main benefits is that it provides protection against inflation, ensuring that your loved ones are financially secure even if prices rise.
Policygenius experts recommend purchasing a traditional life insurance policy with a guaranteed death benefit amount instead because it provides more value for the cost.
An increasing term policy can cover future expenses, such as buying a home or having children, without requiring additional underwriting.
Here are some specific advantages of increasing term insurance:
Rising premiums are structured and predictable, making it easier to budget for the future.
Disadvantages
The disadvantages of this topic are quite significant. One major drawback is the high upfront cost, which can be a significant financial burden for many individuals.

The initial investment is often substantial, making it difficult for some people to afford. This can be a major obstacle for those who are just starting out.
Another disadvantage is the potential for burnout, as the workload can be intense and demanding. This can lead to physical and mental exhaustion if not managed properly.
Furthermore, the learning curve can be steep, requiring a significant amount of time and effort to master the necessary skills. This can be frustrating for those who are eager to get started but struggle to keep up.
Additionally, the risk of failure is always present, which can be a significant source of stress and anxiety. This can be a major discouragement for those who are just starting out.
Types of Term Life Insurance
Types of Term Life Insurance can be complex, but let's break it down. There are several types, including level term life insurance, which has both level premiums and a level death benefit, staying the same throughout the duration of the policy.
On a similar theme: Level Term 20 Life Insurance
Annual renewable life insurance, also known as yearly renewable term, has a term of only one year and can be renewed on a yearly basis, but premiums will increase every time you renew the policy.
Decreasing term life insurance comes with a payout that decreases over time, commonly used to cover loans, like a mortgage. The most popular type of decreasing term policy is mortgage protection insurance (MPI).
Here are some common types of term life insurance with varying lengths of coverage:
How It Works
Increasing term life insurance policies are designed to adapt to your financial life cycle, with coverage starting with a set death benefit that grows at a predetermined rate. This allows you to manage rising debts and future expenses.
Premiums for increasing term insurance policies remain steady initially and increase gradually with the policy's death benefit, making budgeting manageable. This ensures your growing protection aligns with your financial plans.
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The death benefit increases at a fixed rate, keeping coverage in line with inflation and expanding responsibilities. This structured growth guarantees that your family is adequately protected as needs evolve.
Here's a breakdown of how increasing term insurance policies work:
In this example, Michael's cover increases by 10% every year, up to a maximum increase of 2X the base cover. After the 15th policy year, there will be no further increment in the sum assured.
You can also increase your total life insurance coverage by getting an additional life insurance policy, a strategy called laddering. This allows you to keep the life insurance you currently have, but add other policies to provide the financial protection you'll need at various times in your life.
Expand your knowledge: What Types of Death Are Not Covered by Life Insurance
Other Types
You can choose from a variety of term life insurance options beyond the standard 10-40 year terms.
Some common types include 10-year, 15-year, 20-year, 25-year, 30-year, and 40-year term life insurance.
Consider reading: 10 Year Term Life Insurance Cost
You can also consider decreasing term life insurance, which is commonly used to cover loans, such as a mortgage.
Mortgage protection insurance (MPI) is a type of decreasing term policy that pays out a decreasing amount over time.
Return-of-premium life insurance refunds all or part of your premium payments if you outlive the policy's term.
It's usually two to three times more expensive than level term life insurance.
You can also opt for short term life insurance, which provides coverage for a shorter period, typically up to 5 years.
Annual renewable term life insurance is another option, which can be renewed on a yearly basis, but premiums will increase every time you renew the policy.
Temporary life insurance and family income life insurance are also available, but their specifics may vary.
Here's a list of other types of term life insurance:
- 10-year term life insurance
- 15-year term life insurance
- 20-year term life insurance
- 25-year term life insurance
- 30-year term life insurance
- 40-year term life insurance
- Decreasing term life insurance
- Mortgage protection insurance
- Return of premium life insurance
- Short term life insurance
- Annual renewable term life insurance
- Temporary life insurance
- Family income life insurance
Riders and Add-ons
Riders and Add-ons can be a game-changer for increasing your life insurance coverage. Most term life insurance policies and some permanent policies allow you to incorporate riders, which are optional add-ons that can extend your coverage and add flexibility to the terms and conditions.
A term conversion insurance rider can help you convert a term life insurance policy into a permanent or whole life insurance policy without requiring a new medical exam. This can be a cost-effective alternative to re-applying for a brand new policy.
If you're approaching the end of your term and still need life insurance coverage, a term conversion rider is worth considering. It can also help you avoid additional price increases due to your advanced age or new health issues.
A guaranteed insurability rider is another option to consider, especially if you have a permanent life insurance policy. This rider allows you to increase the death benefit after major life events, like getting married or having a baby.
Some benefits of these riders include skipping the medical exam if you need more coverage later on and having adaptable coverage for growing financial obligations. However, keep in mind that these riders won't be cheap, and neither will the permanent life insurance policy that they pair with.
Here are some key benefits of term conversion insurance riders and guaranteed insurability riders at a glance:
Pricing and Cost
A 30-year-old non-smoking female in good health can expect to pay $22 per month ($264 per year) for a 20-year term life insurance policy with a $500,000 payout.
Term life insurance rates are determined by your age, gender, health, coverage amount, and term length. You can expect to pay more for a policy with a higher coverage amount, such as $1 million.
Here's a breakdown of average monthly rates for a 30-year-old non-smoking female:
Securing a policy while younger and in good health can significantly reduce premium costs over time, making it a good idea to shop around and compare quotes.
Best Rates
To get the best rates on life insurance, you need to shop around and compare policies. This can help you find competitive rates and the best terms for coverage growth and premium structures.
Comparing policies is key to securing the best rates. Here are some tips to keep in mind:
- Compare policies from different insurance companies to find the best rates.
- Consider your health and age, as securing a policy while younger and in good health can significantly reduce premium costs over time.
- Tailor your coverage to your family's needs by selecting a coverage amount that aligns with your debts, dependents, and future goals.
Securing a policy while younger and in good health can significantly reduce premium costs over time. This is because insurance companies view younger, healthier individuals as lower-risk customers.
Cost

Term life insurance costs vary depending on several factors. A 30-year-old non-smoking female in good health can expect to pay $22 per month ($264 per year) for a 20-year term life insurance policy with a $500,000 payout.
Your age is a significant factor in determining term life insurance costs. For example, at 20 years old, a female can get a $250,000 coverage amount for $15.01 per month, while a male can get the same coverage for $19.18 per month.
The coverage amount also affects the cost. A 30-year-old male can expect to pay $29 per month for a policy with a $500,000 payout, compared to $22.98 per month for a $250,000 payout.
Health and age are closely tied factors. Securing a policy while younger and in good health can significantly reduce premium costs over time.
Here's a breakdown of average monthly term life insurance rates for non-smokers in a Preferred health classification:
Rates may vary by insurer, term, coverage amount, health class, and state.
Price Inflation Protection
Inflation increases household expenses over time, making it essential to have a financial safety net.
An increasing term policy can provide a higher payout if the assured passes away during the policy tenure, helping the family meet increased expenses easily.
As inflation drives up the cost of goods and services, an increasing term plan can help you cope with the rising costs of your financial goals.
For instance, if higher education for your child might cost Rs.20 lakhs in current times, an increasing term plan can help create a sizeable backup corpus against the inflated costs.
This means you'll have a cushion to fall back on when the time comes to meet those increased expenses.
Discover more: Term Life Insurance Cost by Age
Frequently Asked Questions
Is increasing life insurance worth it?
Increasing life insurance can provide maximum financial protection and peace of mind for your loved ones, especially if you have outstanding debts or financial obligations. Consider increasing your coverage to ensure your family's financial security in the event of your passing.
What is the main benefit of increasing term assurance?
Increasing term assurance helps protect your payout from inflation, ensuring it remains effective for long-term goals like debt repayment or large purchases. This provides peace of mind and helps secure your financial future.
What is increasable term assurance?
Increasable term assurance is a type of life insurance that adjusts its coverage amount to keep pace with inflation, ensuring your policy's value doesn't decrease over time
What do you mean by term assurance?
Term assurance is a type of life insurance that pays out only if the policyholder dies within a specified time period. If they survive the term, the policy expires with no payout.
Sources
- https://www.policygenius.com/life-insurance/increasing-term-insurance/
- https://paradigmlife.net/increasing-term-life-insurance/
- https://www.bajajallianzlife.com/life-insurance-guide/term/increasing-term-insurance-plan.html
- https://lifeinsurance.adityabirlacapital.com/life-insurance-basics/term-insurance-module/increasing-term-insurance-cover/
- https://www.policygenius.com/life-insurance/term-life-insurance/
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