8 Factors that Causes Your Term Insurance Premium to Increase


Term insurance is recognised as one of the most important financial instruments to secure your family’s financial future in your absence. It can reduce the financial burden for your family to a great extent. However, to avail of the term policy benefits, it is important to afford the cost of the term plan benefit. 

And, to prepare yourself to accommodate the cost, which is the premium in the term plan, it is important to understand what factors cause the term policy premium to increase. Here is a detail about some of the prominent factors. 

8 Factors that Causes Your Term Insurance Premium to Increase

Here is the list of 8 factors that cause an increase in the term insurance premiums:

  • Age – Age is the fundamental factor that causes the premium to increase. When you purchase the term plan at an older age, the risk of facing a natural death is extremely high. Therefore, the term insurance premium will increase with the increase in age. Therefore, if you plan to purchase a term plan, get ahead with it when you are young and healthy.
  • Health issues – Insurers decide on the premium and the sum assured based on your health conditions. For example, your term insurance premium increases if you have a deteriorating health record or pre-existing illnesses. The reason is that, with the increase in health complications, the risk of death will also increase. And the insurer will have to afford the risk and ascertain the sum assured. 
  • Gender – Gender is another significant factor that causes the increase in the term insurance premium. Females have a longer life expectancy compared to the male population. Therefore, males cannot afford a longer policy term and may have to pay an increased premium rate.
  • Work environment – Your occupation and work environment are significant factors that will cause an increase in the term insurance premium. For example, if you work in an environment vulnerable to accidents that can lead to death, then the term plan premium will increase. On the other hand, your term policy premium will be nominal if you work in an office with a desk job.
  • Lifestyle – Your lifestyle will determine the cost of term insurance. If you live in a healthy environment following a healthy lifestyle, you might have an affordable premium. On the other hand, if you are forced to live an abnormal lifestyle and are not in a position to change it for your health advantage, then you are at risk. 

For example, suppose you are an IT professional working for a foreign company and do not have a designated work time. In that case, your eating and sleeping patterns will keep changing, leading to damaged metabolism that can introduce dangerous illnesses such as diabetes even at a younger age. Such scenarios can increase your term plan premium.

  • Smoking and Drinking Alcohol Habits – If you are addicted to smoking and drinking alcohol, your term policy premium will increase substantially. These habits are the most common factors that cause death, even in younger adults. Therefore, insurers have to afford the high-risk factor of death that increases the premium if you are engaged in such habits.  
  • Sum assured – The premium will be directly proportional to your sum assured. With the increase in sum assured, the term plan premium will increase. You might have several reasons to expect a high sum assured. However, if your insurer has to take the responsibility of paying the demanded sum assured on your unexpected demise, it will increase the premium to a greater extent.
  • Policy tenure – Policy tenure is another important factor leading to term plan premium increase. If you prefer a higher sum assured but not at a longer policy tenure, your term insurance premium is subject to increase. Insurers offer online premium calculators to derive the most affordable premium. 

For example, when you purchase the Tata AIA term plan online, you can try different combinations of the sum assured and policy tenure to find the best premium based on your income and financial needs. 


Term insurance premiums will increase based on various factors. Age, gender, work environment, lifestyle and habits, policy tenure, and the sum assured are significant factors. Therefore, it is important to be aware of such factors to ensure you derive the exact and the most affordable premium for maximal benefits.