How Much Cover Do You Need?
Human Life Value, income multiples, and a simple way to land on the right sum assured.
The right cover is the amount that lets your family continue their current life and meet future goals — without you. Most planners use one or both of the following methods to land on a number.
Method 1 — Income multiple (simple)
A rule of thumb: 10 to 15 times your annual income, adjusted for outstanding loans. So if you earn ₹15 lakh a year and have a ₹40 lakh home loan, a starting point is roughly ₹1.5–2.25 crore + ₹40 lakh = ₹1.9–2.65 crore.
Method 2 — Human Life Value (detailed)
- Capital needed to generate the family's monthly expenses for 25+ years.
- Plus outstanding loans/EMIs that would otherwise fall on dependents.
- Plus future goals — children's higher education, weddings, spouse's retirement.
- Minus any existing life cover and liquid assets the family can rely on.
Pro tip
Round up. Underinsurance is more painful than slightly higher premium. If you're between two numbers, choose the higher — premiums for term cover are remarkably affordable, especially in your 20s and 30s.
Next Step
Find out how well your family is actually protected.
Get your Family Protection Score in under 60 seconds — no agent, no spam.