Life Insurance Guide | Insurance Help Product Information | Index Linked Term Assurance

Some offices provide the option for the sum assured and premium to be increased each year in relation to the Retail Price Index (RPI), possibly up to a maximum increase of 10% in any year.

Other policies provide cover that is level for, say, five years with a right on expiry to effect a new policy, without evidence of health for a sum assured, increased to match the rate of inflation over the previous five years.

A common feature of this type of policy is that if a policy holder does not exercise the right to increase the cover, the sum assured is frozen at that level and future index linking is not allowed. However, some companies have contracts whereby the sum assured and premium are index linked automatically, although the company can review premiums upwards over the rate of inflation if it wishes.