How much term insurance cover do you need?

Last reviewed: 21 Oct 2026 · Noema Research · 3 min read

Rules of thumb based on income ignore your loans, your goals and what you already own. Add four numbers instead: the money your family would need for the years your income would have covered, your outstanding loans, your fixed goals, then subtract your existing savings and cover. In our example that comes to about ₹2,10,00,000 in today's rupees. If no one depends on your income and your savings already cover your loans, you may need little or no term cover.

Calculate your cover number

Most people guess a round number. Four inputs give you a number you can defend.

Yearly expenses your family would need (₹)Years of support (years)Real return on money left (%)Outstanding loans (₹)Goals to fund (₹)Existing savings and cover (₹)

Estimate

Cover needed about ₹2,10,00,000 (today's rupees)

Estimate, not a prediction.

Step	Amount
Income your family would need	₹1,47,16,290
+ Loans	₹45,00,000
+ Goals	₹25,00,000
− Existing savings and cover	₹7,00,000
= Cover needed	about ₹2,10,00,000

Needs₹2,17,16,290

Existing savings₹7,00,000

How your cover number is built, today's rupees.

Estimate, not a prediction · View as table

Create an account to map this answer against your salary allocation.

Why an income multiple is the wrong start

Ten or fifteen times income is easy to remember, but two people on the same salary can need very different cover. Start from needs, not salary.

Step 1: What would your family need each year?

Your salary isn't the number your family needs; their expenses are. Use their yearly spending without you, for the years until your youngest dependant is self-supporting or your spouse retires.

Step 2: Which loans should be cleared?

A loan left behind turns into a monthly bill your family must pay. Include the outstanding balance of home, car, education and personal loans.

Step 3: Which goals must still happen?

Some goals can't be dropped, such as a child's education. Add them in today's rupees.

Step 4: Subtract what already exists

You are not starting from zero. Subtract investments, provident fund and any personal cover your family could actually use.

When you need less, or none

Cover protects people who depend on your income. If no one does, or your savings already meet the total, a large cover adds cost without purpose.

Life cover and health cover are separate numbers

Term cover protects your family if you die; health cover pays hospital bills while you live. You need to size both.

Review it every few years

Your cover number moves as loans shrink and children grow. Recheck it after marriage, a child, a new loan or a large rise in income.

FAQ

How much term insurance cover should I take?+

Add the money your family would need for the years your income would have covered, your loans and your fixed goals, then subtract savings they could use. Our example comes to about ₹2,10,00,000 in today's rupees.

Is 10 times my income enough?+

Sometimes, but it is a rule of thumb. It ignores loans, goals and existing savings, so work out the four steps instead.

Is ₹1 crore term cover enough?+

It depends on your family's expenses, loans and goals. With ₹9,00,000 a year of needs for 20 years and a ₹45,00,000 loan, ₹1 crore would fall short.

Does my employer's group cover count?+

Only while you stay in that job. Many people exclude it so the cover doesn't disappear when they change jobs.

How often should I review my term cover?+

Every few years, and after marriage, a child, a new loan or a large rise in income.