What term insurance is for
A term plan pays a lump sum to your family if you die during the policy term. It has no savings or maturity value; it's pure protection, which is why it's inexpensive for the cover it gives. The right amount is whatever your family would need to keep living as they do, clear debts and still reach important goals, without you.
How this calculator works
Cover = present value of family expenses until your retirement age
+ outstanding loans + future goals
− savings and investments − existing life coverWorked example
Quick checks
- 10–15× annual income is a common shortcut. Use it as a sanity check against the calculator's result, not a replacement.
- Cover until dependants are independent, usually until retirement age or until your youngest child finishes education.
- Employer group cover isn't enough. It usually ends when you leave the job and is often only 3–5× salary.
Buying tips
- Buy young: premiums are fixed for the whole term and much lower at 25–30 than at 40.
- Disclose everything honestly (smoking, health conditions). Claims can be rejected for non-disclosure.
- Check the insurer's claim settlement ratio and complaints data published by IRDAI.
- Name your nominees, and make sure your family knows the policy exists.
Term insurance protects the plan; it doesn't replace saving. Pair it with a health cover check and an emergency fund.
Frequently asked questions
How much term insurance do I need?
Enough to replace your income for your family until your planned retirement, plus loans and major goals, minus savings. For many people that's 10–15 times annual income.
Should I include my home loan in the cover?
Yes, unless the loan already has a separate insurance policy attached that would clear it.
Is a return-of-premium plan better?
It costs much more for the same cover. Most planners prefer a plain term plan and investing the difference.
Official references: IRDAI