Does Term Life Insurance Premium Change as per Age?

Written by : Knowledge Centre Team

2025-12-25

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Life insurance is one of the most effective instruments of financial risk management. It covers you or your business from various financial risks arising due to any unforeseen event.

But how is the cost of this protection determined?

Key Takeaways

Age affects your premium only at the time of purchase; once locked in, it stays fixed for the entire term.
Insurance companies use mortality rates, derived from actuarial tables, to assess the probability of death at a given age. The higher the mortality rate, the higher the premium.
Since mortality risk increases with age, purchasing a term plan early helps you secure a lower premium that remains unchanged for the entire policy term.
Factors like smoking, alcohol consumption, family medical history, and chronic illnesses elevate your mortality risk, thereby increasing the cost of your term insurance.
Choosing a longer tenure, opting for limited pay options, or adding riders like accidental cover or disability benefits can raise or lower your premium, depending on the structure.

Understanding What Influences Term Insurance Premium

Like all insurance products, life insurance premiums are based on risk. Specifically, they are influenced by the likelihood of the insured event occurring, in this case, death.

Life insurance policies work on the factor which determines the possibility of demise, also called ‘Mortality Rate’.

The life insurance premium will change as the mortality rate changes, and age is one of the most natural factors to affect this change.

So, yes, with age, the premium of a life insurance policy will also change. However, this increase applies only when purchasing a new policy. Once you buy a life insurance policy, the premium remains level throughout the term.

What is the Mortality Rate?

Mortality rate refers to the rate of deaths taking place at a certain age in a defined population during a specific period. This is generally used as a basis for determining the amount of premium to be charged to an insured person. The premium charged by an insurance company is thus referred to as the mortality premium.

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What is the Mortality Premium?

Mortality premium is basically the fee charged by an insurer to provide life coverage to the insured. It’s calculated based on mortality tables, which are actuarial tables detailing the probability of death based on age, gender, and other factors.

A mortality charge is the amount charged for the financial risk that an insurance company may suffer because of so many policyholders dying a premature death (i.e. numerous death claims at a time).

Key Points About Mortality Premium:

It’s higher for older individuals.
It remains fixed for the entire policy once calculated at the time of purchase.
It is kept separately in a “life fund” by insurers to be paid out in case of premature death.

How is Mortality Premium Calculated?

The insurance companies calculate the mortality premium with the help of the mortality table. Here’s how the process works:

Data-Based Estimation: Mortality tables are created using historic death data and life expectancy estimates.
Age-Based Risk: Mortality premiums rise with age, as death probability increases.
Fixed for Policy Term: Once calculated at the time of purchase, the premium remains fixed.

The mortality table displays the death rate for a defined population within a specific period.

AGE LAST BIRTHDAY	MALE 1000gx	MALE LIFE EXPECTATION	FEMALE 1000x	FEMALE LIFE EXPECTATION
COMMISSIONERS 2001 STANDARD ORDINARY MORTALITY TABLE
MALE AND FEMALE
AGE LAST BIRTHDAY
45	2.77	32.73	1.96	36.33
46	3.03	31.82	2.16	35.40
47	3.25	30.92	2.38	34.48
48	3.42	30.02	2.64	33.56
49	3.64	29.13	2.93	32.65
50	3.91	28.23	3.24	31.74
51	4.26	27.34	3.60	30.85
52	4.70	26.46	3.99	29.96
49	3.64	29.13	2.93	32.65
50	3.91	28.23	3.24	31.74
51	4.26	27.34	3.60	30.85
52	4.70	26.46	3.99	29.96
53	5.21	25.58	4.41	29.08
54	5.83	24.72	4.86	28.21
55	6.52	23.86	5.36	27.34
56	7.26	23.02	5.91	26.49
57	7.95	22.19	6.49	25.65
58	8.63	21.37	7.09	24.82
59	9.42	20.55	7.70	23.99
60	10.40	19.75	8.34	23.18

AGE LAST BIRTHDAY	MALE 1000gx	MALE LIFE EXPECTATION	FEMALE 1000x	FEMALE LIFE EXPECTATION
COMMISSIONERS 2001 STANDARD ORDINARY MORTALITY TABLE
MALE AND FEMALE
AGE LAST BIRTHDAY
45	2.77	32.73	1.96	36.33
46	3.03	31.82	2.16	35.40
47	3.25	30.92	2.38	34.48
48	3.42	30.02	2.64	33.56
49	3.64	29.13	2.93	32.65
50	3.91	28.23	3.24	31.74
51	4.26	27.34	3.60	30.85
52	4.70	26.46	3.99	29.96
49	3.64	29.13	2.93	32.65
50	3.91	28.23	3.24	31.74
51	4.26	27.34	3.60	30.85
52	4.70	26.46	3.99	29.96
53	5.21	25.58	4.41	29.08
54	5.83	24.72	4.86	28.21
55	6.52	23.86	5.36	27.34
56	7.26	23.02	5.91	26.49
57	7.95	22.19	6.49	25.65
58	8.63	21.37	7.09	24.82
59	9.42	20.55	7.70	23.99
60	10.40	19.75	8.34	23.18

The insurers take the mortality charge from the policyholder and keep it safe as the “Life Fund”.

This life fund is used to pay out the Gross Death Benefit in case of your early demise during the policy term. It is important to note that the Life Fund is never invested anywhere else. The insurers will always deduct it and save it only to pay the Sum Assured to your family in case you don’t survive the policy.

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Other Factors Affecting Term Insurance Premiums

Besides mortality, many other factors decide the amount of premium you will have to pay. Apart from the health factor, these factors affect your mortality rate. This will impact the cost of your insurance, i.e. the premium to be paid by you.

Lifestyle: Your lifestyle habits have a major role to play in deciding your premium. Certain habits like smoking and drinking put you at a higher risk of death. Hence, if you’re a smoker you will have to pay a higher premium than a non-smoker.
Medical History: If you have a medical history in your family of certain diseases like cancer, heart ailment, or high BP, etc., then the insurance company may consider you susceptible to those diseases from a hereditary perspective. Hence, you will have to pay a higher premium.
Occupation: The type of occupation you are engaged in also plays a vital role in deciding the premium amount. Certain jobs like working in the mines, oil and gas industry, fisheries, or other such dangerous professions increase the death risk. Hence, if you are into such professions, you will have to pay more premium amounts.
Policy Tenure: The term of your policy also decides the premium you need to pay for it. The longer your policy term, the larger the amount of the gross death benefit, since you will pay it for that period. Hence, your premium will be lower than that of a short-term insurance policy.
Premium Payment Term: Another key factor is the premium payment term that you choose. If you choose a premium payment term shorter than the policy term, you will have to pay a higher premium. This is because you will have to pay all your premiums over a shorter duration.
Riders Added: If you have opted for various add-ons or riders with your term life insurance plan, e.g. Accidental Death (ADB), Child Support Benefit (CSB), and Accidental Total & Permanent Disability (ATPD), etc., they will increase the cost of your insurance. You will have to pay a higher amount of premium for the various riders you have added to your term plan.

So, these are various factors that decide the amount of premium you have to pay for your term life insurance.

Why is Mortality Premium Calculated for Life Cover?

The mortality premium is the insurance company’s way to account for the financial risk it takes by insuring your life. It is based on life expectancy and the estimated likelihood of death during the policy term. By charging this, insurers ensure they can cover the guaranteed death benefit payout if needed.

In simpler terms, it’s a cost that helps insurers prepare for the financial responsibility they undertake on your behalf.

Conclusion

Term life insurance provides you with a degree of certainty about the future of your family after your death. However, there's some uncertainty for the insurance company due to your risk of death.

That's why an insurance company charges the mortality premium and expense risk for the life cover they provide. The earlier you buy, the lower your mortality rate and premium. Once locked in, the premium stays the same for the entire policy term, offering peace of mind and financial security to your loved ones.

So, don’t delay. Buy early, save more, and secure your family’s future with confidence.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.