AKG Money

How much life cover do I need?

If your income stopped tomorrow, how long could your family manage? Work out the term cover that replaces your income, clears the loans and still pays for your children's education.

These are example numbers. Change any of them to see your own answer.

Your income
₹

= ₹15 L

Your income minus what you spend on yourself. Usually 60–80%.

%

Until your youngest child is independent, or your spouse retires.

years
What else it should pay for

Home, car and personal loans, so the family isn't left with EMIs.

₹

= ₹40 L

Children's education and weddings.

₹

= ₹50 L

What's already there

Not the house you live in.

₹

= ₹10 L

Term and other personal policies. Count only the sum assured.

₹

Not counted: it ends if you change or lose your job.

₹

= ₹30 L

Buy ₹3.25 Cr

Your family would need about ₹3.25 Crif you weren't there. After what you already have, buy a term plan of about ₹3.25 Cr.

That's
22× your yearly income
10–15× is a common starting point
If you count your group cover from work
₹2.85 Cr
Don't rely on it: it ends if you change or lose your job

What the cover has to pay for

Income for 25 years2,35,06,580

₹10,50,000 a year, rising with prices

Loans to clear40,00,000

Big goals50,00,000

Less: savings−10,00,000

Less: cover you own0

Cover still needed₹3,15,06,580

Rounded up to buy₹3,25,00,000

Term cover to buy₹3.25 Cr

How this is worked out

  1. Income to replace: the share of your take-home your family would still need, every year for as many years as they'd need it, rising with prices. The payout is assumed to be kept safe and earn the return you set.
  2. Add loans still owed and big goals such as education and weddings.
  3. Subtract savings the family could use and personal life cover you already own. Group cover through work is shown separately and not counted, because it ends with the job.
  4. Policies are sold in round amounts, so the result is rounded up to the next ₹25 lakh.

Questions people ask

Why term insurance and not a policy that pays back?

Term insurance gives the most cover for the least money because it pays only if you die during the term. Policies that return money combine low cover with low returns; see the endowment calculator.

Until what age should the cover run?

Until your family no longer depends on your income, usually until 60–65, when loans are paid off and children are independent.

Is my employer's group cover enough?

Rarely, and it ends when you leave the job, exactly when you might need it. Buy your own term plan while you're young and healthy; premiums are fixed for the whole term.

Should my spouse have cover too?

If your family relies on their income, yes. A non-earning spouse's work at home also costs money to replace, so a smaller cover can make sense.

Is my data saved anywhere?

No. Everything is worked out in your browser. Your numbers stay on your own device, and the page link holds them so you can share them.

Related calculators