Can you beat inflation with increasing Cover?

Term Insurance is weird. You pick a number — your total cover. The insurer promises to provide the said cover in case you die. And in return, you continue paying a premium every single year until that day comes. Or your paying term concludes. And while there is nothing peculiar about this arrangement in itself, think about the implications of your decision 15 years from now. A one crore cover might look paltry if you haven’t taken inflation into account.

Which is why most people decide on the sum insured assuming inflation will continue to make ground each year.

But what if you didn’t have to worry about all this while picking a cover. What if your sum insured grew by 5% or 10% each year? That would save you a whole lot of trouble. However, it would also mean your premiums will grow at the same rate each year. After all, there is no free lunch in this world. So if you are looking to buy a term policy with an increasing cover each year, remember your premiums will also grow in tandem.

You could opt for this benefit or you could simply do the calculation right now and pick a larger cover that will protect against inflation. It’s on you really.

If you need help shortlisting a good term policy or if you want to talk about your cover amount, text us on Whatsapp.


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