Indian consumers continue to compare term insurance premiums, but emerging buying behaviour suggests that price competition is often taking place within a small group of insurers that consumers already trust.
Term insurance remains one of the most price-sensitive segments of insurance. But the way consumers compare prices is changing. Many buyers do not compare every insurer in the market. Instead, they tend to shortlist two or three brands they already recognise and trust, and then compare premiums within that group. *
This makes brand an important part of the term insurance purchase decision, particularly because the person buying the policy is generally not the person who will eventually make the claim.
The smoker premium comes as a surprise
One of the recurring patterns seen in term insurance conversations is the surprise among buyers when they discover the impact of tobacco use on their premiums. *
The underlying premium difference is well documented, although the extent varies by insurer, age and product. Published estimates cited in the report put smoker loading broadly between 40% and 100% in different cases. Published industry reports indicate 40–75% loading for general term cover, while other analyses have reported loadings of around 70–100% for specific products and customer profiles.
The issue is partly one of transparency.
Consumers may not always realise that insurers can consider a wider range of tobacco use when determining smoker status. Depending on the insurer and product, this can include cigarettes, beedis and smokeless tobacco such as gutkha or hookah.
WHO's 2025 India profile estimates that around 9.5% of adults smoke tobacco, while 23.5% use tobacco in some form. The latter includes non-smoking forms of tobacco and should not be interpreted as the proportion of Indians who smoke.
Surfacing these pricing implications earlier in the purchase journey could help consumers understand the likely premium before they reach the final underwriting stage.
Is "cover till 70" becoming the new benchmark?
The duration of term insurance is also changing.
Market interactions with buyers show a recurring preference for cover extending until around age 70.* This is not yet an established industry-wide norm, but it represents an emerging benchmark in consumer conversations.
The logic behind the preference is relatively straightforward. Financial dependency can extend well beyond the traditional retirement age, particularly as families deal with children's education, outstanding loans, dependent parents and longer life expectancy.
Rather than linking policy duration only to employment or loan tenure, consumers are increasingly considering how long their family would remain financially dependent on them.
Age 70 can therefore serve as a useful starting point when discussing policy duration, although the appropriate tenure ultimately depends on an individual's income, liabilities, family structure and financial goals.
Brand remains a powerful trust signal
Perhaps the most interesting shift is the continued importance of brands despite growing digital comparison.
Market interactions suggest that consumers often prefer to buy from a small group of established insurers even when another insurer offers a lower premium for comparable cover. *
This behaviour is particularly understandable in term insurance because the buyer is purchasing a promise for the future. The policyholder may never personally experience the claim process. Their family will.
As a result, consumers may use brand reputation as a proxy for confidence that a claim will be honoured and serviced when the time comes.
Several leading insurers report claim-settlement ratios above 98%, but this metric alone does not capture every aspect of the claims experience. It does not necessarily reflect differences in repudiation rates, claim severity, turnaround times, complaints, exclusions or servicing quality.
This creates an interesting competitive dynamic
A challenger insurer may offer a lower premium and have strong publicly available claims metrics, but still struggle to overcome the familiarity and perceived security associated with an established brand.
Making trust measurable and understandable
For insurers, particularly newer players, the challenge may therefore be less about simply publishing claims data and more about making that information easy for consumers to understand.
Term insurance buyers need to be able to evaluate not just the premium but also the insurer's track record, product terms, underwriting approach and claims experience.
The same applies to distributors.
Explaining why a smoker pays more, why a particular tenure may be appropriate and what claims metrics actually mean can help reduce the information gap between insurers and consumers.
The term insurance market is therefore evolving in an interesting direction.
Consumers remain price-conscious, but price does not operate in isolation. Brand, perceived claim security and the duration of protection all influence the decision.
For insurers, the opportunity is to make the value behind the premium clearer. For consumers, the challenge is to look beyond the headline price and understand what they are actually buying.
As term insurance becomes increasingly researched and compared online, the brands that can make their claims record, underwriting and product terms easier to understand may have an advantage in earning consumer confidence.
*The observations marked with an asterisk are based on INKA’s proprietary field interactions with insurance consumers. These observations are directional in nature and should not be interpreted as statistically validated or independently representative of the broader insurance market. They are intended to provide market context and consumer-level insights, and should be read alongside the independently sourced data cited in the article.
Insights Focus is a marketing initiative for sponsored posts. No VCCircle journalist was involved in the creation of this content.