If something happened to you tomorrow, would your family be financially secure? This calculator uses the Human Life Value method to estimate the term insurance cover you actually need — not just a flat multiple of income.
Formula (Human Life Value Method)
Income Replacement = Annual Income × Years to Retirement × 0.7
Total Need = Income Replacement + Outstanding Loans − Savings − Existing Cover
Example: ₹12 lakh income, 30 years to retirement, ₹25 lakh loan, ₹5 lakh savings, no existing cover → roughly ₹2.7 crore recommended cover (the 0.7 factor accounts for the fact that not 100% of income is needed to sustain dependents once your own consumption is removed).
Term Cover by Income (15x Rule of Thumb vs HLV Method)
| Annual Income | 15x Simple Rule | HLV Method (typical) |
|---|
| ₹6 lakh | ₹90 lakh | ₹1-1.2 crore |
| ₹12 lakh | ₹1.8 crore | ₹2-2.7 crore |
| ₹20 lakh | ₹3 crore | ₹3.5-4.5 crore |
| ₹35 lakh | ₹5.25 crore | ₹6-7.5 crore |
The HLV method usually recommends higher cover than the flat "15x income" rule because it explicitly accounts for loans and years of future income, not just a rough multiple.
Frequently Asked Questions
How much term insurance cover do I need?
A common rule is 10-15 times your annual income. This calculator refines that using your outstanding loans, years to retirement, existing savings and cover for a more accurate, personalized figure.
What is the Human Life Value method?
It estimates the cover needed to replace your future income for your dependents, plus outstanding debts, minus existing savings and insurance — giving a more accurate figure than a flat income multiple.
Is term insurance better than a traditional life insurance policy?
For pure protection, yes — term plans give much higher cover for a fraction of the premium of traditional endowment or ULIP policies, since they have no investment component.
Do I need term insurance if I'm unmarried with no dependents?
If no one depends on your income and you have no loans that would burden family, cover is less urgent — but buying young locks in lower premiums for when you do have dependents later.
What's not covered under a term plan?
Most policies exclude death by suicide within the first year, and some exclude high-risk activities, pre-existing undisclosed conditions, or death outside the policy's geographic coverage — always read exclusions carefully.
Should I buy multiple term policies from different insurers?
Some people split cover across 2 insurers to diversify claim-settlement risk, though a single large policy from a highly-rated insurer with a strong claim settlement ratio is simpler to manage.
What is a claim settlement ratio and why does it matter?
It's the percentage of claims an insurer pays out versus rejects. A consistently high ratio (95%+) over several years is a strong indicator of a reliable insurer.
Can I increase my cover later?
Some plans offer a built-in option to increase cover at life stages (marriage, childbirth) without fresh medical tests. Otherwise, you can always buy an additional separate policy.
Does smoking affect my premium significantly?
Yes, often by 50-100% higher premiums for the same cover, since smokers are classified as higher risk. Always disclose smoking honestly — non-disclosure risks claim rejection.
What happens to my premiums if I outlive the policy term?
With a pure term plan, you get nothing back — the premium paid is purely the cost of protection, similar to any insurance. This is why term plans are cheaper than "return of premium" versions.
*Estimated premium is illustrative only and varies significantly by insurer, health, smoking status and policy terms. This calculator does not replace advice from a licensed insurance advisor.