How much term insurance cover do you really need?
Cover should replace the income your family depends on, plus loans and big goals, minus what you've already saved.
"10 times your salary" is a quick rule, but it often falls short. A better way is to add up what your family would actually need.
The four parts
- Living expenses for as many years as your family depends on you, rising with inflation.
- Loans still outstanding, such as a home loan.
- Big goals like children's education and marriage.
- Minus savings and any life cover you already have.
An example
A family spending ₹40,000 a month and needing support for 25 years, with 6% inflation and 7% returns on the payout, needs about ₹1.04 crore just for living expenses. Add a home loan and education goals, and the right cover is often ₹1.5–2 crore.
Why term insurance
A pure term plan gives the most cover for the lowest premium because it has no investment part. The insurer decides the final premium after checking your health and income.
This article is general information, not personal financial advice. Rules and rates change; check the latest before you act.