₹1 crore — it sounds like a lot, doesn’t it?
That number has become the default benchmark in India’s term insurance market. You’ve seen it everywhere: ads, policy comparisons, even YouTube reviews. But here’s the real question…
Is ₹1 crore of term insurance actually enough to protect your family?
Or is it just a round number that sounds safe?
Let’s break it down.
Why Everyone Talks About ₹1 Crore
Over the past decade, life insurance companies have turned ₹1 crore into a buzzword — and for good reason. It’s easy to remember, sounds aspirational, and thanks to online term plans, it’s become surprisingly affordable.
If you’re under 35, non-smoker, and salaried — you could get ₹1 crore cover for ₹500–₹1,200/month depending on the policy term and tenure.
That’s helped boost awareness. But not everyone who buys ₹1 crore cover actually needs that amount — and many who need more settle for this as a default.
Does ₹1 Crore Actually Cover Your Family’s Needs?
To figure that out, ask yourself one thing:
How many years of income should my life insurance replace?
The general rule? 10 to 15 times your annual income.
Let’s do the math:
| Your Annual Income | Ideal Term Cover | Is ₹1 Cr Enough? |
|---|---|---|
| ₹3 – ₹4 lakh | ₹30 – ₹60 lakh | Yes |
| ₹6 – ₹8 lakh | ₹90 lakh – ₹1.2 Cr | Borderline |
| ₹10 lakh+ | ₹1.5 – ₹2 Cr+ | Likely not enough |
So if you earn ₹12 lakh/year, a ₹1 crore payout gives your family around 8 years of income — before accounting for inflation, EMIs, or education expenses. Not ideal.
Inflation Will Shrink That “Big” Number
Let’s say you’re 30 and buying a 30-year term plan.
By the time your family receives the payout (hopefully never), ₹1 crore in today’s money will be worth only ₹50–₹60 lakh — assuming average 6% inflation.
That’s a big drop. That’s why:
- Some insurers offer increasing cover options
- You can upgrade your policy during milestones (marriage, childbirth, etc.)
Smart tip? Start high when you’re young and healthy — premiums are lower, and your future is better protected.
Loans + Kids = More Cover Needed
If you’ve got:
- A home loan of ₹50–₹70 lakh
- Kids in private schools or planning abroad education
- Only one earning member in the household
Then ₹1 crore is likely not enough.
In these cases, aim for ₹1.5–₹2 crore or more, depending on your liabilities and savings.
But for someone who’s:
- Debt-free
- Has employer-provided cover
- No long-term financial dependents
… ₹1 crore could be more than enough.
When ₹1 Crore Might Actually Be Too Much
Rare, but possible. For example:
- You earn ₹15K–₹20K/month and live in a debt-free joint family
- You already have group cover through your job or government schemes like PMJJBY
- You don’t have long-term dependents
But here’s the thing — term insurance is so affordable that it’s better to slightly over-cover than under-cover.
Final Word: Don’t Follow the Crowd — Do the Math
₹1 crore is not a magic number.
It’s just a reference point.
Here’s what you should actually do:
- Use a trusted life cover calculator
- Factor in income, EMIs, dependents, and future expenses
- Always adjust for inflation
- Review every few years as your responsibilities grow
Because under-insuring your family can leave them vulnerable — and the difference is just a few hundred rupees a month.
