Do Life Insurance Premiums Increase Every Year?

Buy a Life Insurance Plan in a few clicks


Now you can buy life insurance plan online.

  • Icon for Kotak Preferred e-Term Plan

    Kotak e-Term Plan

    Kotak e-Term Plan provides a high level of protection to your loved ones in your absence.

  • Kotak E-Invest Plan

    Kotak e-Invest plan is a complete Unit-Linked Insurance Plan that can be customized as per your goals and needs.

  • Icon for Kotak Guaranteed Savings Plan

    Kotak Guaranteed Savings Plan

    Kotak Guaranteed Savings Plan is a savings and protection plan that helps you achieve long-term financial goals and provides an insurance cover against any eventuality.

  • Icon for Kotak Preferred e-Term Plan

    Kotak Lifetime Income Plan

    Kotak Lifetime Income Plan gives you the security of your income continuing thru your life and in your absence throughout your spouse's lifetime!

  • Icon for Kotak Preferred e-Term Plan

    Kotak Health Shield

    Kotak Health Shield Plan helps secure your finances in sudden medical expenses such as Cardiac, Liver, Neuro, and Cancer (all early and significant illness stages/conditions of cancer), along with offering protection for personal accidents - in case of accidental death or disability.


Get a Call

Enter your contact details below and we will get in touch with you at the earliest.

  • Select your Query

Thank you

Our representative will get in touch with you at the earliest.


Do Life Insurance Premiums Increase Every Year?

Term Insurance Quote
  • 10th Nov 2021
  • 381

Do Life Insurance Premiums Increase Every Year?

A life insurance policy is a contract between the insurer and the primary where the insurance provider promises to pay a claim to the beneficiaries if the insured dies within the chosen term period. The policy remains active only if the insured pays life insurance premiums on time.

Since life insurance premium payment is a full-time financial responsibility, it’s critical to choose a premium structure that aligns with your financial goals. Although the benefits of the insurance are immense, the life insurance policy age limit is something worth taking note of. If you wish to acquire one, you may do so as early as the age of 18, and the life cover can be extended up to 75 years, depending on the insurance firm. Additionally, under whole life cover policies, the cover provided can be up to 99 years of age.

The fact that life insurance premiums are susceptible to a yearly increase is an intriguing feature of the policy that demands a comprehensive understanding of the underlying causes.

Reasons That Cause Insurance Premiums to Annually Hike

  • Increasing Age
  • As you become older, the likelihood of developing medical issues increases, which consequently impacts your risk profile - the higher the risk, the higher the premium. Therefore, from an individual point of view, the life insurance premium payment amount increases every year.

  • Medical Expenditures Are On a Rise
  • Medical sector expenses grow by 15% per year as a result of technical improvements in the healthcare sector and rising inflation. As a result, doctors are compensated more, medications become costlier, and testing and medical procedures become more complex and expensive. Due to such hikes, insurance companies raise life insurance premiums.

Policy Type and Life Insurance Premiums

  • Individual Life Insurance/Group Life Insurance
  • This is a form of life insurance policy in which just one individual pays the premium and is covered by the policy. Individual life insurance is distinct from group life insurance, which protects the loved ones of the policyholder or workers of an organisation. It generally aims to meet the financial obligations of the living spouse or other family members.


The premium of individual life insurance is higher than group life insurance. In addition, because the risk is contained to a single individual, the insured is unable to benefit from the cost reductions associated with risk distribution across a group. It does, however, offer additional coverage and flexibility, letting policyholders select the coverage they desire.

  • Single Premium Life Insurance/Regular Premium Life Insurance
  • A single premium life insurance policy is one where you pay a flat amount of money is paid to the insurance in exchange for a death benefit that is assured to your loved ones when you pass away.


To completely fund the insurance policy, customers are charged in a single up-front life insurance premium payment format. However, many applicants cannot afford single premium life insurance since it needs a substantial quantity of money from the insured. For such individuals, there are other options for premium payments such as monthly, quarterly, bi-annually, etc.

Like other types of insurance, life insurances are susceptible to annual premium increases as a result of external and internal variables. Nevertheless, this does not deter people from getting insurance because the policy providers offer multiple benefits and empower them to customise their policy’s terms and conditions to suit their needs. With a thorough understanding of the terms and conditions of the policy, you can avail multiple benefits and ensure a peaceful life for your family.

- A Consumer Education Initiative series by Kotak Life

Also read

  • When are Millennials required to take out a life insurance policy?

    Here’s all the information you millennials need in terms of life insurance. Read here to know about how it’s important to have life insurance for ...

    Read more
    • 16th Nov 2021
    • 395

    How to Choose Life Insurance for All Ages?

    Buying affordable and high-quality life insurance coverage is available across a variety of age ranges. Here's how to find the policy that fits your n...

    Read more
  • Why do I Need Life Insurance?

    Do you really need Life Insurance?

    Read more

Related Plans

  • Kotak Lifetime Income Plan

    Kotak Lifetime Income Plan

    Kotak Lifetime Income Plan gives you the assurance of your income continuing throughout your life and in your absence throughout the lifetime of your ...

    Know more