Incremental term insurance or increasing term insurance is a variant of term life insurance where the assured sum grows annually at a fixed rate.
The assured amount increases annually but certain plans impose a limit on the maximum augmentation in the sum assured, and once this limit is reached, the increase halts. The pace at which the promised sum increases is expressed as a percentage. In either scenario, the escalation rate is predetermined and remains steady throughout the plan's duration.
Similar to conventional term life insurance schemes, increasing term life insurance programs solely provide a death benefit. The death benefit amount is determined by the sum assured at the commencement of the policy year in which the policyholder passes away.
In the event of accidental death or disability during the plan's duration, the benefit rider provides an extra assured sum.
In the event of the life insured's death in an accident or disability, this rider exempts future premiums while the plan remains active.
Riders serve as optional add-ons that broaden the coverage scope when chosen.
Compiled by Syed Muskan