How Much Term Insurance Do You Need?
Not which policy to buy — how much cover your family would actually need if your income stopped tomorrow. That number depends on your income, your liabilities, and what you already have, not a flat rule of thumb.
Your real numbers, not a generic example
Your situation
What you'd spend on yourself alone — the rest is what your family depends on.
How much term insurance cover do I need on ₹12,00,000 income?
Get ₹2,20,00,000 more cover.
Replacing 70% of your income for 25 years plus clearing ₹30,00,000 in outstanding liabilities works out to about ₹2,40,00,000 your family would need. Your existing ₹20,00,000 cover leaves a gap of ₹2,20,00,000.
The gap is large enough to hold across a reasonable range of expense and horizon assumptions.
Evidence
Annual income
₹12,00,000
Your own share of income (not passed to family)(assumed)
30%
Outstanding liabilities (loans etc.)
₹30,00,000
Existing life cover
₹20,00,000
Total cover needed
₹2,40,00,000
Alternatives considered
- 10x annual income (common rule of thumb)−₹1,20,00,000 difference from your actual calculated need
Valid while your income, liabilities, and existing cover stay near these figures. Re-check after a raise, a new loan, or any change to existing policies.
Monitor: your income, liabilities, and existing cover as they change
Computed live from your inputs, not a template — try adjusting the numbers above.
This calculator assumes
- The income-replacement method: your family needs your income (minus what you'd spend on yourself) for the years until your retirement, plus enough to clear existing loans.
- No inflation adjustment on future income or expenses — a real plan should revisit this every few years, not just once.
- This is a coverage estimate, not a policy recommendation — MoneySuttra doesn't sell or endorse any specific insurer or plan.
How this is calculated
This uses the income-replacement method: it estimates the income your family would lose if you weren't there to earn it, for as many years as you have left until retirement, then adds whatever loans or debts they'd otherwise have to repay themselves. Your existing cover is subtracted from that total to show the gap, if any.
Common cover mistakes
Relying on the "10x income" rule
It ignores your actual liabilities and years left to earn — it can under-cover someone with a large home loan just as easily as it over-covers someone close to retirement.
Counting employer-provided cover as enough
Group cover from your employer usually ends the day you leave the job — it isn't a substitute for your own policy.
Never revisiting the number
A new loan, a child, or a raise all change what your family would need — cover taken out a decade ago rarely still fits.
Related calculators
Term Insurance vs Endowment: What's the Difference?Frequently asked questions
Does MoneySuttra recommend a specific insurer or policy?
Why does the 10x income rule show a different number?
Should I choose term insurance or an endowment plan?
Uses the income-replacement method for coverage estimation — a standard approach, not unique to MoneySuttra. Read our Methodology and Editorial Policy.