Increasing Term Life Insurance

For a young family or business starting out, there can be a lot of confusion about what an increased term life insurance quote might look like. However, with the right strategy, some insurers can find you an affordable increased term life insurance policy starting as low as $25 dollars a month for a 20-year policy with a 100,000 death benefit. The rates are likely to increase with time, however.

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Natasha McLachlan is a writer who currently lives in Southern California. She is an alumna of California College of the Arts, where she obtained her B.A. in Writing and Literature. Her current work revolves around insurance guides and informational articles. She truly enjoys helping others learn more about everyday, practical matters through her work.

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Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance for 10 years. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate...

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Reviewed by Laura Walker
Former Licensed Agent

UPDATED: Aug 31, 2021

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The Rundown

  • Term life insurance is guaranteed for a set amount of time
  • Increased term life insurance increases the death benefit as the policy matures
  • The coverage and death benefit can also be customized further with riders

Worried your suggested death benefit won’t be enough? The future can be uncertain, and an unexpected death can throw even stable lives into a hard place. That being said, there are ways to mitigate this. Increased term life insurance was created to give the insured extra help.

With an increased term life insurance policy, the death benefit will go up over the policy’s life. When considering a term life insurance policy with your insurance provider, you may want to ask about increased term life insurance or any riders that might increase your benefit.

Looking for increased term life insurance quotes? Enter your ZIP code to get an idea of what you can pay for a new policy.

What is an increasing term life insurance policy?

Increasing term life insurance is similar to term life in that it lasts for a set amount of time, usually up to a few decades. If you die within the set term, your beneficiary will receive the death benefit; if you live past your agreement, the beneficiary won’t receive anything.

Term life policies are great options for those who are growing their families or anything else that would require a large sum of money. Once the kids are grown, the need for that financial cushion becomes less.

Where an increasing term life insurance company differs from the traditional term is the death benefit that increases over time. It can be used to factor for inflation or provide for the needs of a growing family. The biggest benefit is that the premiums won’t get higher over time.

Can you increase term life insurance coverage?

With a traditional term life insurance policy, you’re stuck with the initial death benefit that you signed up for.

So if you’re faced with a larger family or more bills, you might wish you had opted for more coverage. With increasing term life insurance, you’ll have more than you signed up for.

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Pros & Cons of Increasing Term Life Insurance

Just like with all types of life insurance, increasing term life insurance will differ in value based on your individual needs.

Depending on what you need the death benefit for and your preference of permanent insurance, an increasing term life insurance quote might not be useful to your situation.

What are the benefits of term life insurance?

There are a number of benefits present in a term life insurance policy, including:

  • Insurance only for as long as you need it
  • Usually more affordable than permanent life insurance coverage
  • Most simple and straightforward life insurance policy

Traditionally, a term life insurance policy will only cover a portion of your life, usually up to a few decades. This makes the policy perfect for those who just want coverage to last while they grow their family, and it will be less needed as the family begins to grow and succeed on their own.

The option for an increased term life insurance policy opens up some more advantages, like:

  • Increased death benefit to cover your family if it grows unexpectedly
  • Typically level premiums; only the death benefit increases

With an increased term life insurance policy, the ones you care about will be left with a larger death benefit if there is a larger need for one. This can be used to further support a small family or can cover the various financial issues a company might face when a leader dies.

What are the disadvantages of term life insurance?

As previously mentioned, increased term life insurance isn’t a one-size-fits-all policy. There will be those that might find traditional term or a permanent life insurance policy more suited to their needs. Some of the reasons for this might include:

  • No cash value to be loaned against or added to the policy
  • No death benefit if you outlive the policy 
  • When you start to get older, the insurer will limit your accessibility to certain life insurance policies

Depending on your life’s circumstances, you might find that term life insurance or increasing term life insurance rates might not be for you. That’s okay, as there are a number of other policies that are sure to appeal more to your specific needs.

Riders to Customize Increasing Term Life

Riders are attached to an insurance policy to guarantee more coverage or customization on your policy. These can do everything from insuring a child to providing accidental death coverage. These riders will help you get the most out of your increased term life insurance policy.

  • Term Conversion – This provides the option to switch your policy over to a permanent life insurance policy
  • Guaranteed Insurability – This rider can help you increase your death benefit in case of a major life event, with no additional underwriting
  • Family Income – In case the insured dies, the family will receive a steady flow of cash that is meant to replace the main earner until new arrangements are made

There are many more as well, and the life insurance riders available will likely differ between each insurer. If you’re interested in seeing which are best for you, you can discuss with your financial planner or the insurance company where you’re getting your policy.

Other Types of Term Life Insurance

There are a few other types of term life insurance policies that might be more accessible to families who can’t find affordable increasing term life insurance. Each policy has its own benefits, and whether it will be right for you will largely depend on your circumstances.

According to III, a level term life insurance policy is the most straightforward life insurance on the market. The insured will be insured for a previously agreed upon amount of time for a set death benefit. If the person dies in that time, their family will receive the benefit.

Renewable term life works similarly to level term, but the policy can be renewed with no underwriting up to a certain age. Some are even able to be converted to a whole life policy without having to prove insurability again.

The return of premium term life insurance policy is the most different from level term. Normally, the insured wouldn’t receive any kind of money back if they didn’t have a claim. While the premiums will cost more, this policy will give back a portion of your premiums if you outlive the policy.

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Increasing Term Life: The Bottom Line

For those who are unsure of what the future might bring, it would be smart to buy increasing term life insurance. Since this policy’s benefit increases over time, the beneficiary will likely receive more money to help with the difficult transition.

This policy can help young families or new businesses stay afloat when they lose a valued member.

Are you curious about what you could pay for increased term life insurance rates? Enter your ZIP code into our free tool to get an idea of what you can pay.

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