Life Insurance Calculator
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Quick Summary
- Calculate the right term insurance cover for your family based on income replacement, loans and future goals, avoiding under- or over-insuring.
- For example, Annual income ₹12 lakh, no liabilities works out to Suggested cover ≈ ₹1.2-1.8 crore.
- Built for salaried individuals and primary earners sizing the term insurance cover their family would need
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Recommended Life Cover
Income Replacement
₹0
Liabilities Cover
₹0
Years Covered
0 yrs
How this is calculated
Cover = (Annual Income × Years to 60) + Liabilities − Existing Coverage. This ensures your family can replace your income until retirement age and clear all debts. Rule of thumb: minimum 10–15× annual income.
How the Life Insurance Calculator Works
Using the income-replacement method, the calculator multiplies your annual income by a standard cover multiple, adds your outstanding loans/liabilities, and subtracts your existing savings and investments — arriving at the term cover your family would need to stay financially secure without your income.
Example Scenarios
| Scenario | Result |
|---|---|
| Annual income ₹12 lakh, no liabilities | Suggested cover ≈ ₹1.2-1.8 crore |
| Annual income ₹8 lakh + ₹30 lakh home loan | Suggested cover ≈ ₹1.1-1.5 crore |
| Annual income ₹20 lakh, ₹40 lakh existing savings | Suggested cover reduced by existing savings |
* Illustrative estimates assuming constant annual returns. Actual results vary with market conditions.
Frequently Asked Questions
A common rule of thumb is 10-15 times your annual income, but a more accurate approach (the human life value / income replacement method) also adds outstanding liabilities (home loan, other debts) and subtracts existing savings and investments, so your family can replace your income and clear debts if something happens to you.
Term insurance offers the highest cover for the lowest premium because it's pure protection with no investment component. Financial planners generally recommend buying term insurance for protection and investing separately (mutual funds, PPF) for wealth creation, rather than mixing the two in an endowment or ULIP.
The earlier the better — premiums are locked in based on your age and health at purchase, so buying in your 20s or early 30s secures a much lower premium for the same cover compared to buying in your 40s.
Common Mistakes to Avoid
- Buying cover equal to only 5-6x annual income when 10-15x is closer to what's actually needed.
- Mixing insurance and investment in a single ULIP or endowment policy instead of buying pure term cover.
- Delaying the purchase — premiums rise sharply with age and any new health conditions.
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* Calculations assume constant annual returns. Actual mutual fund returns vary. Past performance is not indicative of future results. FD comparison uses 7% p.a. SIP returns are compounded monthly.
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