The amount of Life Insurance coverage you need will depend on many factors such as:
- How many dependents do you have?
- What kind of lifestyle do you want to provide for your family in case of your untimely death?
- How much money will be needed for your children’s education?
What your investment needs are? - How much can you afford to pay?
- As a general practice, the calculation for Sum Assured in a Term Insurance policy is – Minimum Sum Assured = Annual Income x 10 times + Loans/Liabilities.
If you can afford the premiums (which are pretty affordable for the kind of coverage you get), we recommend that you go in for 15 to 20 times your annual income. Keep topping up with additional covers in case there is a quantum jump in your income. Start taking life cover as early as possible in your earning life – the premiums are really low when your age is less – and they remain the same throughout the policy term once you have taken the plan.
Compare your term insurance premiums.
| Annual Income | Sum Assured @ 15 times | Sum Assured @ 20 times |
| 1 Lakh | 15 Lakhs | 20 Lakhs |
| 2 Lakhs | 30 Lakhs | 40 Lakhs |
| 3 Lakhs | 45 Lakhs | 60 Lakhs |
| 4 Lakhs | 60 Lakhs | 80 Lakhs |
| 5 Lakhs | 75 Lakhs | 1.00 Crore |
| 6 Lakhs | 90 Lakhs | 1.20 Crores |
| 7 Lakhs | 1.05 Crores | 1.40 Crores |
| 8 Lakhs | 1.20 Crores | 1.60 Crores |
| 9 Lakhs | 1.35 Crores | 1.80 Crores |
| 10 Lakhs | 1.50 Crores | 2.00 Crores |
| 15 Lakhs | 2.25 Crores | 3.00 Crores |
| 20 Lakhs | 3.00 Crores | 4.00 Crores |
| 25 Lakhs | 3.75 Crores | 5.00 Crores |
| 30 Lakhs | 4.50 Crores | 6.00 Crores |
