FAQs 138 views October 20, 2018

Costs are increasing with rising inflation. An amount earned today might not be sufficient to take care of expenses that may arise five or ten years hence. The amount of life cover that you choose on your term insurance depending on your current income may ensure financial security for a short period, but may not be enough to repay the debts or loans that you may have taken while alive. No matter how morbid it may sound, the extent of life cover you choose must not be limited to what your life is worth, thus, triggering the need to opt for an increasing term policy, also called incremental term insurance.

Incremental term insurance is inflation-adjusted term insurance plans in which the amount of sum assured increases by a fixed percentage each year. In some cases, the rate of increase can be as high as 10 percent every year, thus, securing loved ones from the burdening and pervasive impact of inflation.  In addition, incremental term insurance plans are different from level term policies in the sense that the premiums towards the former increase every year as opposed to the former requiring payment of fixed premium amounts. However, like most term insurance plans available in the market, incremental term policies allow the scope to opt for additional riders, thus, offering greater protection. One may opt for multiple rider benefits like critical illness rider and accidental death benefit rider. In addition, other kinds of riders that allow scope for premium waiver available in level term insurance policies are also available with inflation-adjusted term insurance plans.

Currently, only the following incremental term insurance plans are available in the market.

Insurer NameName of the Insurance PlanLimits of Sum Assured AllowedPercentage increase in the Sum AssuredSalient Features
Aditya Birla Sun Life Insurance Company LimitedBirla Sun Life Insurance Protect @ EaseEqual to or more than Rs. 30 lakhs5% or 10% simple rate of increase in the sum assured at the beginning of each year
  • The plan can be taken on a joint basis by any couple;
  • The amount of sum assured can be raised further on marriage and childbirth;
  • Availing added rider benefits increase the scope of coverage
Aditya Birla Sun Life Insurance Company LimitedBirla Sun Life Protector Plus PlanEqual to or more than Rs. 30 lakhs5% or 10% simple rate of increase in the sum assured at the beginning of every year
  • The plan comes with an inbuilt Total and Permanent Disability Benefit
  • One can opt for death benefit payouts as installments
  • Choosing to opt for added riders to augment the scope of coverage
SBI Life Insurance CompanySBI Life Smart ShieldEqual to or more than Rs. 25 lakhs5% simple rate of increase in the sum assured at the beginning of each year
  • This plan comes with three optional riders for greater protection
  • The premiums towards this plan are affordable premiums owing to attractive discounts
SBI Life Insurance CompanySBI Life eShield PlanEqual to or more than Rs. 20 lakhs10% simple rate of increase in the sum assured at the beginning of each year
  • There are two plan options that come with an inbuilt
  • Accidental Death Benefit