How Much Life Insurance Do You Really Need in India?

Why Guessing Could Leave Your Family Unprotected

Most people in India pick their life insurance number out of thin air — or worse, go by the old myth of “10 times your salary.”

But here’s the hard truth: that shortcut could leave your family struggling.

Because life insurance isn’t just about dying — it’s about protecting the life your family lives after you’re gone.

What Should Life Insurance Actually Do?

At its core, life insurance replaces your income — so your loved ones can continue paying bills, chasing dreams, and living with dignity, even without you.

So a good policy should cover:

• Your family’s monthly expenses (for 15–25 years)
• Kids’ education and marriage
• Loan repayments (like home, car, or personal EMIs)
• Medical or emergency costs
• And yes — future inflation, because ₹1 today won’t buy the same tomorrow

Think of insurance as a financial seatbelt. You don’t hope for a crash, but if it happens, you’ll be glad it was there.

The Smartest Way to Calculate Your Ideal Cover

Here’s a simple and realistic formula used by experts:

Life Cover = (Annual Income × Years Left to Retire)
➕ Outstanding Loans
➖ Existing Savings/Investments

Let’s break that down with an example:

• You’re 35 years old
• You earn ₹6 lakh a year
• You plan to retire at 60 (25 years to go)
• You have ₹15 lakh in loans
• You’ve saved ₹5 lakh

Your ideal cover = (₹6L × 25) + ₹15L – ₹5L = ₹1.6 crore

That’s not a guess — that’s your real financial safety net.

“But I’m Single — Do I Still Need Life Insurance?”

Yes — and here’s why:

Even without a spouse or kids, you may:

• Have loans with your parents as co-borrowers
• Support aging parents or a younger sibling
• Plan to marry or buy a house in the next 5 years

Getting covered early = cheaper premiums
And more importantly, it protects the people who already rely on you — whether you realize it or not.

“I’m in My 50s — Is It Too Late?”

Not at all.

Your needs may have changed, but insurance still matters. Even a smaller policy can:

• Pay off any remaining loans
• Help your spouse manage expenses
• Cover your own final costs or medical bills
• Offer a tax-free legacy to your children or grandkids

It’s never too late for peace of mind.

What to Include in Your Cover Estimate

When calculating, make sure you factor in:

• (Monthly expenses × 12) × Years of dependency
• All loan balances
• Future needs: kids’ college, weddings, your spouse’s retirement
• A 10–20% inflation buffer
• And finally, subtract existing savings, FDs, mutual funds, or rental income

The goal? Make sure every rupee your family might lose is protected.

Common Mistakes That Leave Families Exposed

Here’s where most people go wrong:

• Choosing just enough to match the home loan
• Never updating cover after marriage or children
• Relying only on company-provided insurance
• Picking a plan just to save tax under Section 80C
• Forgetting that ₹50 lakh today won’t be ₹50 lakh in 15 years

According to IRDAI’s 2023 report, 1 in 3 life policies in India were surrendered within 5 years — mostly because they weren’t right to begin with.

Want a Tool to Help You Decide?

We’re building an easy Life Insurance Calculator at eBharat — it’ll help you:

• Estimate your ideal cover
• Compare premiums
• Match policies to your income and family needs

Final Thought

Life insurance isn’t about fear. It’s about love.

It’s about giving your family the gift of financial peace — even if you’re not there.

So whether you earn ₹25,000/month or ₹2 lakh/month, don’t leave it to guesswork.
Let math — not emotion — decide your cover. And then sleep better knowing your family’s future is safe.

👉 Check Your Ideal Cover — and Compare Smart Plans Now