Finance · Free tool
Term Insurance Cover Calculator
Most Indians are massively under-insured. Rule of thumb: cover should equal 10–20× annual income, plus outstanding loans and big future goals (children's education).
10× minimum, 15× balanced, 20× conservative.
A pure-term policy of ₹2,90,00,000 for a 30-year-old typically costs ₹15,000–25,000/year.
How the cover number is built
We use the Human Life Value approach: income replacement (10–20× current annual income, higher for younger earners), plus outstanding liabilities (home loan, car loan, personal loan), plus future goals (children's education, a daughter's wedding), minus any cover you already own through employer group term or LIC endowments.
Worked example
A 32-year-old earning ₹15 LPA in Bengaluru with a ₹60 lakh home loan, a 2-year-old child and ₹5 lakh employer cover should target roughly: 15 × 15 = ₹2.25 cr income replacement + ₹60 L loan + ₹40 L for higher education − ₹5 L existing = approx ₹3.2 crore sum assured. A 30-year term plan at that cover typically costs ₹14,000–18,000/year for a non-smoker, less than 1.5% of take-home.
When to revisit your cover
- Marriage, or birth of a child (dependants change)
- Taking a new home loan or top-up loan
- Salary jumps of 30%+ — old cover is now under-sized
- Switching jobs and losing employer group cover
Pair the result with the ULIP vs term + MF comparison to see why a pure term policy plus a separate SIP almost always beats a bundled ULIP, and read how much term insurance you actually need for the full framework.
FAQ
Why 10-20× annual income?
It replaces your earning capacity over the dependant period. At 10×, your spouse can invest the cover and live off the returns. Most planners suggest 12-15× for early career, 8-10× near retirement.
Term cover till age 60 or 75?
Until your earning years end. If retiring at 60 and dependents will be self-sufficient, 60 is fine. If you have late-life dependants, extend to 70-75. Premium roughly doubles for the longer period.
Is term insurance taxable on payout?
No — death benefit is fully tax-free under section 10(10D). Premium also qualifies for 80C deduction (within ₹1.5L cap).