Can Life Insurance Premiums Increase? How Policy Rates Work

Article-At-A-Glance

• Whether your life insurance premium can increase depends on the type of policy and which premium provisions are guaranteed by the contract.
• A level term life insurance policy generally keeps the scheduled premium level during its guaranteed level-premium period, even if the insured gets older or experiences a change in health.
• Renewable term coverage may allow you to continue coverage after an initial term or level-premium period, but scheduled renewal premiums can increase.
• Whole life, universal life, and other permanent policies can have different premium structures, so you should not assume that every permanent policy has the same premium guarantees.
• The policy contract and illustration, when applicable, are the best places to determine which premiums, benefits, and values are guaranteed.

Can a life insurance company raise your premium?

The answer depends on the policy you own.

Some life insurance policies provide guaranteed level premiums for a specified period. Others are designed with premiums that change according to a schedule. Certain permanent policies may also have flexible or nonguaranteed elements that make it especially important to understand how much must be paid to keep coverage in force.

The key distinction is not simply whether you own “term” or “permanent” life insurance.

It is:

What does your actual policy guarantee?

Can Life Insurance Premiums Go Up?

Yes, life insurance premiums can increase under some policy structures.

But an insurer generally cannot simply disregard contractual premium guarantees and charge a different premium because the insured became older or experienced a health change.

Instead, possible premium changes depend on provisions established by the policy.

For example:

• A level term policy may guarantee a scheduled premium for a specified level-premium period.
• Renewable term coverage may have scheduled premiums that increase when coverage is renewed or continued.
• Some permanent policies use scheduled premiums.
• Universal life policies can involve flexible premium payments and changing policy costs.
• Some policies contain both guaranteed and nonguaranteed elements.

That is why consumers should review the policy rather than relying on a general statement that life insurance premiums either “always stay the same” or “increase as you get older.”

Can a Level Term Life Insurance Premium Increase?

During a guaranteed level-premium period, the scheduled premium on a level term life insurance policy is designed to remain level according to the policy’s terms.

For example, a policy might provide a 10-, 20-, or 30-year level-premium period.

If the insured develops a health condition during that period, the insurer does not ordinarily re-underwrite the existing policy and increase the guaranteed scheduled premium because of the health change.

Likewise, simply becoming older during the guaranteed level period does not by itself cause that scheduled premium to increase.

However, the policy should be reviewed carefully.

A “20-year term policy,” for example, should not automatically be assumed to mean that every premium or policy provision remains unchanged for exactly 20 years unless the contract provides that guarantee.

What Happens to Premiums After the Level Term Period?

This is where many consumers encounter higher premiums.

Some term policies permit coverage to continue or renew after the original level-premium period.

If continuation is available, the scheduled premium may increase substantially according to the policy’s renewal schedule and the insured’s attained age.

This is different from the insurer re-underwriting you because your health changed.

A renewable term provision may allow eligible coverage to continue without new evidence of insurability, while the premium changes according to rates or schedules established by the contract.

Before the original level-premium period ends, review:

• Whether the policy can be renewed or continued
• How renewal premiums are determined
• How frequently premiums can change
• How long renewal rights continue
• Whether the policy has a conversion privilege

Our guide to managing your term life insurance policy explains renewal, conversion, and end-of-term options in greater detail.

What About Yearly Renewable Term Life Insurance?

Yearly renewable term life insurance is structured differently from a multi-year level-premium policy.

Depending on the contract, coverage may be renewable from year to year while scheduled premiums increase as the insured reaches higher attained ages.

That does not mean the insurer unexpectedly decided to raise the premium.

The changing premium structure is part of the policy.

When comparing renewable term coverage, review the future premium schedule rather than evaluating the policy solely by its initial premium.

A low first-year premium does not necessarily mean the policy will remain the least expensive option over the period you expect to need coverage.

Does Getting Older Raise the Premium on an Existing Policy?

Not necessarily.

Age is an important underwriting and pricing factor when life insurance is purchased.

But once a policy is issued, whether future premiums change depends on the policy’s provisions.

With guaranteed level term coverage, getting older during the level-premium period does not ordinarily change the scheduled premium.

With annually renewable or other renewable term structures, attained age may be part of the contractual renewal-premium schedule.

And if you apply for a completely new policy later, your age at that time can affect the premium offered on the new coverage.

Those are three different situations:

Situation	How Age May Affect Premiums
Existing Level-Premium Term Policy	Age generally does not change the scheduled premium during the guaranteed level-premium period.
Renewable Term Coverage	Scheduled renewal premiums may increase according to the policy’s provisions and attained age.
Applying for New Coverage	Your current age is one of the factors the insurer may use when underwriting and pricing the new application.

Can a Health Change Raise Your Existing Life Insurance Premium?

A change in health does not ordinarily cause an insurer to re-underwrite an existing guaranteed level term policy and increase its scheduled premium during the guaranteed period.

Once life insurance has been issued and remains in force, later health changes are generally treated differently from health information considered when applying for new coverage.

However, health can become relevant if you later apply for another policy.

For example, if your original term coverage is approaching its end and you apply for a new term policy, the new insurer may evaluate your health under its current underwriting guidelines.

That new application should not be confused with continuing coverage under an existing contractual renewal provision.

What Happens if You Apply for a New Life Insurance Policy?

A new application generally means new underwriting.

The insurer may consider factors such as:

• Current age
• Current health and medical history
• Tobacco or nicotine use
• Coverage amount
• Policy type
• Term length when applicable
• Occupation and activities
• Other underwriting factors used by the insurer

The premium offered on new coverage may therefore be different from the premium on a policy purchased years earlier.

Do not cancel an existing life insurance policy simply because you have submitted an application for replacement coverage.

Review the new policy and make sure the new coverage is in force as intended before taking action that could leave you without the existing protection.

Can Whole Life Insurance Premiums Increase?

Whole life insurance is commonly designed with scheduled premiums that remain level according to the policy’s guarantees.

However, consumers should not assume that every policy labeled “whole life” has an identical premium structure.

Whole life products can have different premium-payment designs and contractual provisions. Some policies may also contain nonguaranteed elements, such as dividends, that should not be confused with guaranteed policy values or premiums.

The appropriate question is:

What premium does this particular policy guarantee, and for how long?

Review the policy and any applicable illustration to distinguish guaranteed elements from nonguaranteed assumptions.

Universal Life Premiums Work Differently

Universal life insurance should not be evaluated using the same premium assumptions as ordinary level-premium term or traditional whole life insurance.

Universal life policies can allow flexibility in premium payments and death benefits, subject to the policy’s provisions.

The policy also contains charges and values that affect whether sufficient value exists to keep coverage in force.

Depending on the type of universal life policy, factors affecting policy performance can include:

• Premium payments
• Policy charges
• Interest credited to the policy
• Cash or account value
• Death benefit option
• Loans or withdrawals
• Guaranteed and nonguaranteed assumptions

Paying the same amount every year does not necessarily guarantee that every universal life policy will remain in force indefinitely.

Policyholders should review current policy information and understand what premium or funding level may be necessary to maintain the coverage they intend to keep.

Guaranteed vs. Nonguaranteed Life Insurance Values

This distinction is particularly important when evaluating permanent life insurance.

A policy or illustration may contain both:

Guaranteed values — benefits, premiums, or values the insurer contractually guarantees subject to the policy’s terms.

Nonguaranteed values — values based on assumptions or current experience that can change.

Nonguaranteed elements should not be treated as promises.

When reviewing a life insurance policy or illustration, ask:

• Which premiums are guaranteed?
• For how long are they guaranteed?
• Which benefits or cash values are guaranteed?
• Which values are based on current assumptions?
• Could additional premium payments be needed to maintain the intended coverage?
• What happens if actual policy performance differs from the illustrated assumptions?

The National Association of Insurance Commissioners advises consumers to understand which parts of a life insurance policy or illustration are guaranteed and which are not.

Can a Policy Lapse Affect What You Pay?

A lapse and a premium increase are not the same thing.

A policy can lapse when required premiums or other policy requirements are not satisfied and available policy values or contractual protections are insufficient to maintain coverage.

Some policies may provide a grace period or reinstatement rights subject to the contract and applicable law.

Reinstatement requirements vary.

Depending on the policy and circumstances, the insurer may require:

• Payment of overdue premiums
• Interest or other amounts specified by the contract
• Evidence of insurability
• Completion of reinstatement forms
• Other requirements established by the policy

Do not assume that reinstating a policy means the insurer simply recalculates the original premium based on your new age.

Likewise, do not assume reinstatement will always be available.

If a payment has been missed, review the policy and contact the insurer promptly to determine the available options and applicable deadlines.

Can Improved Health Lower Your Existing Life Insurance Premium?

Improved health does not automatically reduce the contractual premium on an existing policy.

Some insurers or products may have procedures under which a policyholder can request reconsideration of an underwriting classification after specified circumstances or requirements are met, but availability and requirements vary.

Another possibility is applying for new coverage.

However, applying for a new policy means the insurer evaluates the applicant under its current underwriting guidelines and considers the overall risk profile—not merely the one health factor that improved.

For example, someone whose health has improved in one area may have experienced changes in age, medications, medical history, or other underwriting factors since the original policy was issued.

Never cancel an existing policy merely because you expect new underwriting to produce a lower premium.

Wait until any replacement coverage has been issued, reviewed, accepted, and is in force as intended before deciding what to do with existing coverage.

What About Tobacco or Nicotine Status?

Tobacco and nicotine underwriting classifications vary among insurers.

Do not rely on a universal rule that someone automatically qualifies for a particular nonsmoker classification after a specific number of months without tobacco or nicotine.

Insurers can differ in:

• How they define tobacco or nicotine use
• Which products they include
• The look-back period they use
• The underwriting classification available
• Whether reconsideration of an existing classification is permitted

If tobacco or nicotine use has changed since a policy was issued, ask the insurer or licensed insurance professional what options, if any, are available under that policy and carrier’s underwriting rules.

How to Tell Whether Your Life Insurance Premium Can Change

The most reliable answer is in your policy.

Review sections dealing with:

• Premiums
• Premium schedules
• Guaranteed premiums
• Renewability
• Policy charges
• Cash or account values
• Grace periods
• Lapse
• Reinstatement
• Loans and withdrawals
• Guaranteed and nonguaranteed values

If you have a policy illustration, distinguish the guaranteed column from any nonguaranteed or current-assumption values.

If the wording is unclear, ask the insurer or licensed insurance professional to identify specifically:

Which premium is guaranteed, how long it is guaranteed, and under what circumstances the amount required to maintain coverage could change.

Frequently Asked Questions About Life Insurance Premium Increases

Can a life insurance company raise my premium because I got sick?

For an existing level term policy with a guaranteed scheduled premium during the level period, a later health change does not ordinarily cause the insurer to re-underwrite the policy and increase that guaranteed premium.

Health may become relevant if you later apply for new coverage.

Other life insurance products can have different premium and policy-value structures, so review the contract for the coverage you actually own.

Will my term life insurance premium increase every year as I get older?

Not if your policy provides a guaranteed level premium during that period.

Yearly renewable term works differently and may have scheduled premiums that increase as the insured reaches higher attained ages.

Check the premium schedule in your policy.

What happens to my premium when my level term period ends?

It depends on the policy.

Some policies allow coverage to continue or renew after the original level-premium period, but scheduled renewal premiums may be considerably higher.

Other options may include applying for new coverage or using an eligible conversion privilege.

Review those options before the level-premium period ends.

Can whole life insurance premiums increase?

Many traditional whole life policies are structured with guaranteed scheduled premiums, but not every whole life product has an identical design.

Review the policy’s premium guarantees rather than relying solely on the product label.

Also distinguish guaranteed policy provisions from nonguaranteed elements such as dividends.

Can universal life insurance require higher premium payments later?

Potentially.

Universal life policies can involve flexible premiums, policy charges, account values, credited interest, loans, withdrawals, and other factors that affect policy performance.

Depending on the contract and policy performance, additional premium payments may be needed to maintain the intended coverage.

Review current policy information and guarantees rather than assuming that an initial payment amount will always be sufficient.

Can I lower my premium if my health improves?

Possibly, but it is not automatic.

Some insurers may permit reconsideration under particular circumstances, or you could explore newly underwritten coverage.

Carrier rules and underwriting requirements vary.

Do not cancel existing coverage until replacement coverage, if any, has been issued and is in force as intended.

Does missing a payment permanently increase my premium?

Not necessarily.

A missed payment can create a grace-period or lapse issue depending on the policy.

If the policy lapses, reinstatement rights and requirements are determined by the contract and applicable law.

Do not assume reinstatement automatically means paying a newly age-rated premium. Contact the insurer promptly if a payment has been missed.

Understand the Guarantee Before You Buy

The most important question about life insurance premiums is not simply whether they can increase.

It is:

What does this particular policy guarantee?

A level term policy may guarantee its scheduled premium during a specified level period.

Renewable term coverage may have scheduled increases.

Whole life and other permanent products can have different premium structures and guarantees.

Universal life can involve flexible premiums and policy values that require ongoing attention.

Before purchasing coverage, review the policy structure, premium guarantees, renewal provisions, and any nonguaranteed elements.

For consumer information about life insurance premiums and policy features, visit the National Association of Insurance Commissioners life insurance consumer resource.

Georgia consumers can also review life insurance guidance from the Georgia Office of the Commissioner of Insurance and Safety Fire.

Have Questions About Life Insurance Premiums?

If you’re comparing life insurance options or trying to understand the premium structure of coverage you’re considering, Ranwell Insurance can help you review the features and questions that matter.

Call (855) 508-5008 to discuss your life insurance options, or explore our life insurance calculators to estimate coverage and budget ranges.