If someone depends on your income, a reasonable term cover is 10 to 15 times your annual income — more if you have big loans, less if your family already has significant assets. For a person earning Rs.12 lakh a year, that is roughly Rs.1.2 to 1.8 crore.
Term insurance is the cheapest, simplest life cover: you pay a small premium, and if you die during the term, your family gets a fixed payout. No investment, no maturity value — which is exactly why it is cheap.
Here are two ways to size it.
Take your annual income and multiply:
| Your situation | Multiple of annual income |
|---|---|
| Young, few dependents, small loans | 10x |
| Married, kids, home loan | 12-15x |
| Sole earner, large loan, young kids | 15-20x |
Then add any outstanding loans (home, car, personal) and subtract life cover you already have and liquid assets your family could use.
Add up what your family would actually need if your income stopped:
The total is your cover. This method is more accurate because it is built on your real commitments, not a rule of thumb.
Term insurance is the safety net under your whole financial plan — it is what keeps the goals funded if you are not around. The planner on this site sizes your recommended term (and health) cover from your income, dependents and loans, and reserves the premium in your monthly budget before allocating the rest to goals.
Q. Term or whole-life insurance?
A. Term, in almost every case. Whole-life costs many times more for the same cover; the "lifelong" benefit rarely justifies the price when your investments should make you self-insured by retirement.
Q. Should my cover amount increase over time?
A. Your need usually falls as your investments grow and loans reduce, so a level cover bought young is fine. If your income jumps significantly, you can add a second policy.
Q. Is a return-of-premium term plan worth it?
A. Usually not. It costs noticeably more, and investing the difference yourself typically leaves you better off. Plain term is the efficient choice.
Q. Does a housewife or non-earning spouse need term cover?
A. If their absence would create real costs (childcare, running the home) or they have taken a loan, a modest cover can make sense. The priority is always the main earner first.
Plan Our Future · AMFI-registered Mutual Fund Distributor (ARN-360754). Mutual Fund investments are subject to market risks, read all scheme related documents carefully.