How much term cover does your family need?

Term insurance has one job: if the earning member is not there, the family should still be able to live the same life, pay off loans and reach its goals. So the right cover depends on your family, not on a round number.

A quick method in four steps

1. Income replacement: start with 10 to 15 times your yearly income. Younger people with many working years ahead are usually nearer the higher end.
2. Add your loans: home loan, car loan, business loan — anything the family would have to repay.
3. Add big goals: children's education and marriage, in today's cost.
4. Subtract what you already have: savings, investments and existing life cover.

An example

Rakesh is 35 and earns ₹8 lakh a year. He has a home loan of ₹20 lakh and wants ₹15 lakh kept aside for his child's education. He has ₹5 lakh of savings and no life cover.

• Income replacement: 12 × ₹8 lakh = ₹96 lakh
• Plus loan ₹20 lakh and goal ₹15 lakh = ₹1.31 crore
• Minus savings ₹5 lakh = about ₹1.26 crore

This is only a rough guide. Our term cover calculator uses the Human Life Value method with your own numbers.

Things people often miss

• Choose the cover to last till your planned retirement age, when the family no longer depends on your income.
• Review it after marriage, a child, a new loan or a big jump in income.
• Declare your health and habits honestly in the proposal form.
• Tell your family about the policy and keep the nominee updated.

Insurance is the subject matter of solicitation. For more details on risk factors, terms and conditions, please read the sales brochure and policy wording carefully before concluding a sale.