What is the Term Insurance?
Term insurance is pure life cover — no maturity value, which is exactly why it is cheap. A 30-year-old can typically buy ₹1 crore of cover for ₹10,000–15,000 a year.
The right amount is not a round number but a calculation: replace lost income, clear all debt, and fund the goals your family still has — then subtract what you already have.
Formula & worked example
Cover needed = Requirement − existing assets − existing cover
Worked example: ₹15,00,000 income replaced for 20 years at 70% = ₹2.1 crore, plus ₹35 lakh of loans and ₹50 lakh of goals = ₹2.95 crore required. Less ₹20 lakh of assets and ₹50 lakh of existing cover leaves an additional need of ₹2.25 crore — about 20× income, versus the ₹50 lakh most people would guess.
How to use this term insurance calculator
- Enter your annual income — the income the family would lose.
- Choose years to replace: until your youngest is independent, or to your retirement age.
- Add every loan, including home and car.
- Add major future goals your family would still face.
- Subtract existing assets and any employer or personal cover.
Smart tips
- A common rule is 10–15× annual income, but a needs-based calculation is usually higher and more accurate.
- Buy term cover young. Premiums are locked at entry age, so a 25-year-old pays far less for life than a 35-year-old.
- Choose cover until your dependants are financially independent — usually to age 60, not 80.
- Disclose everything on the application. Non-disclosure is the leading cause of claim rejection.
- Employer group cover ends when the job does. Never treat it as your primary protection.
Frequently asked questions
How much term insurance do I need?
Typically 10–20× annual income, adjusted for loans, goals and existing assets. This calculator gives your specific figure rather than a rule of thumb.
Is term insurance worth it if nothing happens?
Yes — you are buying certainty for your family, not an investment. Term plans are cheap precisely because they pay nothing at maturity.
Term insurance or endowment plan?
Term, almost always. Endowment and ULIP plans mix insurance with poor-return investment. Buy cheap term cover and invest the difference separately.
Until what age should my cover run?
Until your dependants no longer rely on your income — usually your planned retirement age. Cover to 80 or 100 costs far more for little benefit.
Want the theory behind the numbers? Read our insurance guides on the Money Blog.