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How Much Term Insurance Cover Do You Need?

Term insurance pays your family a lump sum if you pass away during the policy. The right cover depends on your income, loans and family needs.

Method 1: rule of thumb

Many planners suggest 10 to 15 times your yearly income. For ₹12 lakh, that is ₹1.2 crore to ₹1.8 crore.

Method 2: replace your income

This method estimates how much money your family would need to replace the income they would lose until your retirement, then adds loans and subtracts savings and existing cover.

Example: income ₹12 lakh, age 30, retiring at 60, family needs 70% of income, inflation 6%, return 7%, loans ₹30 lakh, savings ₹5 lakh.

Try it in the Term Insurance Calculator.

Which should you pick?

The second method gives a higher number for a young person, because it covers many years. Many people choose between the two, based on their budget and what their family truly needs. Premiums are lower when you buy young and healthy.

Tips

1. Buy term insurance for protection, not for returns.
2. Choose a term that covers your working years and loans.
3. Disclose your health and habits honestly.
4. Review your cover when you marry, have children or take a big loan.

This is a rough estimate and not advice to buy a specific policy.