Insurance Planner

Term Insurance Calculator

Calculate the right term life insurance cover based on your income, liabilities, and dependents. Aim for 10-15x annual income.

Home loan + car loan + other debts

Years your income should be replaced

Recommended Cover

Income Component

Income × Cover Years

Liabilities Component

Total outstanding debt

Additional Cover Needed

Rule of Thumb Check

Your recommended cover is times your annual income.

Financial advisors typically recommend 10–15x annual income.

Cover Composition

This is a simplified estimate. Consider dependent count, future inflation, and financial goals when choosing cover. Consult a SEBI-registered advisor for comprehensive insurance planning. Results are indicative only.

What is a Term Insurance Calculator?

A term insurance calculator helps you estimate how much life insurance cover you need based on your income, liabilities, and the number of years your family would need income replacement. Unlike ULIPs or endowment plans, term insurance is pure protection — low premium, high cover, no investment component. It pays the sum assured only if the insured passes away during the policy term.

A common recommended formula is: Cover = (Annual Income × Cover Years) + Outstanding Liabilities. Financial advisors typically recommend 10–15× your annual income as a minimum, adjusted upward based on dependents, liabilities, and future financial goals. This calculator computes your recommended cover and shows how much additional cover you need beyond any existing policy.

How to Use This Term Insurance Calculator

  1. 1

    Enter your annual income

    Use your current gross annual income. This is the baseline for the income replacement component of your cover. If income grows significantly, plan to increase your cover periodically.

  2. 2

    Add your total liabilities

    Include home loan outstanding, car loan, personal loan, and any other debts. These must be cleared by the insurance payout so your family is not burdened with debt repayments.

  3. 3

    Enter existing term cover

    If you have an existing term policy (e.g., from employer group life or individual policy), enter the sum assured here. The calculator shows the additional cover needed on top.

  4. 4

    Set income cover years

    The number of years your family needs income replacement — typically until your youngest child completes education and becomes financially independent. 15–20 years is common for most households.

Why Term Insurance is the Best Life Cover

Maximum Cover at Minimum Cost

A ₹1 crore term plan for a 30-year-old non-smoker costs ₹7,000–₹12,000/year. The same premium in a ULIP or endowment policy buys a fraction of the cover. Term insurance gives your family the best protection per rupee spent.

Keep Insurance and Investment Separate

Term insurance + mutual fund SIP consistently outperforms ULIPs and endowment plans over 10+ years. You get better insurance cover AND better investment returns by keeping these separate.

Buy Early for Lower Premiums

Premiums lock in at purchase age. A ₹1 crore policy at 25 costs significantly less than the same policy at 35 or 45. Every year you delay term insurance costs more and risks insurability if health changes.

Critical for Breadwinners

If you're the primary earner with dependents (spouse, children, parents), term insurance is non-negotiable. The payout can fund children's education, repay loans, and provide monthly income through an annuity for your family.

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FAQs

Frequently asked questions

How much term insurance cover do I need?
A common rule: 10–15 times your annual income. This should cover income replacement for dependents, outstanding debts (home loan, car loan), children's future education, and spouse's retirement needs. This calculator gives a precise recommendation based on your financial obligations.

At what age should I buy term insurance?
Buy term insurance as early as possible — ideally in your mid-20s when you start earning. Premiums are lowest when you are young and healthy. A 25-year-old pays roughly 40–50% less premium than a 35-year-old for the same cover.

What is the difference between term and whole life insurance?
Term insurance provides pure life cover at low cost — if you die during the term, your nominee gets the sum assured. Whole life policies combine insurance with investment but cost 10–20x more for the same cover. Financial planners universally recommend term insurance + separate investments.

Are term insurance premiums tax-deductible?
Yes. Premiums paid for term insurance qualify for tax deduction under Section 80C up to ₹1.5 lakh per year (old regime). The death benefit received by nominees is fully tax-free under Section 10(10D).