Insurance Need Calculator: How Much Life Cover Do You Need?
Most Indians Are Underinsured by 80%
The average Indian life insurance policy is ₹5–10 lakh. But if you’re the primary earner with a family, you need 10–15 times your annual income as cover. A ₹12 lakh/year earner needs at least ₹1.2–1.8 crore in cover — not ₹5 lakh.
The Income Replacement Method
Cover Needed = (Annual Expenses × Years of Support) + Outstanding Debts + Future Goals – Existing Assets
Worked Example
| Component | Amount |
|---|---|
| Annual family expenses | ₹6,00,000 |
| Years until youngest child is independent | 20 years |
| Expense cover needed (with inflation) | ₹1,50,00,000 |
| Outstanding home loan | ₹30,00,000 |
| Children’s education fund | ₹20,00,000 |
| Existing savings/investments | (₹15,00,000) |
| Total cover needed | ₹1,85,00,000 |
Term Insurance vs Endowment
- Term plan: ₹1 crore cover = ₹700–1,000/month. Pure protection, no maturity value. Best choice.
- Endowment/ULIP: ₹1 crore cover = ₹8,000–15,000/month. Returns 5–6% (below FD). Avoid for protection.
Calculate your exact cover need with the insurance need calculator.