How to Increase Term Plan Coverage after Purchasing a Policy?

A life insurance cover is designed to ensure that your family remains financially secure. The payout from a term insurance plan can support essential needs such as children’s education, their wedding expenses, or even the repayment of outstanding loans, giving your loved ones stability during a difficult time.

 

However, at times, the sum insured may not cover every cost when the benefit is eventually paid out. Changing circumstances, rising expenses, and inflation can all influence how far that amount will stretch in the future. Let’s explore how to increase term insurance cover.

 

What is Increasing Term Insurance?

Increasing term insurance refers to a policy where the sum assured keeps rising every year instead of staying fixed. The increase typically occurs at a predetermined rate (such as 5% or 10% annually) to match inflation and growing family needs. As the cover goes up with time, the premium is higher than a normal term plan. This type of plan helps keep your protection relevant as expenses and responsibilities grow.

 

Increase term insurance cover

Here’s how to increase term insurance cover in different ways.

 

1. Purchase a new policy when you want an upgrade

Purchasing another policy can be an option. To do so, you must go through the entire documentation again and take fresh medical tests as well. Given that you'll be older by the time (and may even have some new health issues) you opt for a new policy, as your upgrade could be expensive.  

 

2. Choose a plan with life-stage increment

The life-stage increment choice adds adaptability to your insurance plan that will take care of your old age issues. This special component empowers your protection during the critical phases of your life. Additionally, this advantage doesn't require you to bear additional expenses or a higher term plan premium.

 

3. Purchase an increasing term insurance coverage

You can buy term protection with an increasing life insurance term coverage. According to the process involved, this cover can be a suitable one. The total guaranteed1 amount can continue to grow gradually as your life goes on. Neither will you need to go through any new medical tests, nor is there a danger of your upgrade getting rejected.

 

Benefits of increasing term insurance 

Here are the benefits of increasing term insurance policies.

 

Inflation protection

A major challenge with a fixed cover is that inflation erodes the real value over time. What seems like a ₹1 crore today may feel far less reassuring two decades later. An increasing term plan solves this by letting your cover grow gradually, so it stays meaningful in the long run.

 

Grows with your responsibilities

As life moves ahead, your financial responsibilities tend to increase—children’s education, a home loan, long-term savings, and so on. An increasing cover adjusts alongside these milestones, giving you protection that keeps pace with your real needs.

 

No reassessment needed

If you try to increase your sum assured by taking a fresh policy or modifying an existing one, you may have to go through medical checks and extra documentation again. With an increasing term insurance plan, this isn’t necessary; your cover rises each year automatically, without extra hassle.

 

Affordability 

This structure also makes it appealing for young professionals. You can begin with a smaller cover, something like ₹25 lakh and a lower premium, and let it rise over time as your income grows. It’s a practical way to secure larger protection without stretching your budget early in your career.

 

Tax benefits  

Just like other life insurance plans, increasing term insurance offers tax* beneftis under Section 80C and Section 10(10D) of the Income Tax Act, giving you financial protection and tax efficiency together.

 

Conclusion 

Generally, choosing the right kind of term policy can be overwhelming for you. With the increasing term plan, it all becomes better. In fact, you should ask for increasing coverage at the time of purchasing a term protection plan for the benefit of your family. It doesn't expect you to go through any medical tests or present any new documentation, all this, while ensuring that your family has adequate cover till the end of the term. When you choose to go for increased coverage, the options could be irresistible. Tata AIA term insurance offers a range of term policies that can take care of your life’s responsibilities, even in your absence.