# How Much Term Insurance Do I Need? A Clear Method > How much term insurance do you need? Why 10x income often falls short, a step-by-step method with worked numbers, policy term and edge cases. Source: https://trykosh.com/learn/how-much-term-insurance-do-i-need Guide - Insurance # How much term insurance do you need? Term insurance has one job: if you die, your family should be able to live roughly as they would have, clear the loans and still fund the big goals. Here's how to put a number on that, step by step. Updated 25 October 20266 min readBy the Kosh team On this page[The short answer](#short-answer)[Why 10 times income often falls short](#rules-of-thumb)[Step by step: the needs-based method](#method)[A second example: early career](#early-career)[How long the policy should run](#policy-term)[When to review, and how to add cover](#review)[Edge cases](#edge-cases)[Term insurance vs investment-linked policies](#vs-investment-policies)[FAQs](#faq) ## The short answer Your cover should equal **the value of the income your family would lose, plus your loans, plus your big goals, minus the life cover and savings they already have**. For a 32-year-old earning INR 15 lakh a year with a home loan and children, that can come close to 20 times take-home income, well above the familiar "10 times income" rule. If nobody depends on your income and you have no loans that someone else would have to repay, you may not need term insurance yet. Buy it when that changes, ideally while you're young and healthy. ## Why 10 times income often falls short Rules of thumb ignore the two things that drive the need most: how many working years you have left, and how much you owe. The [term insurance calculator](/tools/term-insurance-calculator) puts them side by side for a 32-year-old with a INR 15 lakh take-home, a INR 40 lakh home loan and INR 30 lakh of children's goals: Three ways to size cover for the same person Method Cover 10 x take-home income INR 1.5 crore 15 x take-home income INR 2.25 crore Income replacement + loans + goals INR 3.01 crore The 10x figure would leave this family about INR 1.5 crore short, before counting the cover and savings they already have. ## Step by step: the needs-based method 1. **Start with take-home income**, after tax, since that's what the family lives on. Here, INR 15 lakh a year. 2. **Remove what you spend on yourself.** Your own food, commute, clothes and phone stop with you. At 25%, the family's share is **INR 11.25 lakh** a year. 3. **Value that income until you'd have stopped working.** From 32 to 60 is 28 years. Grow the income 5% a year and discount it at a modest 7%, what the payout might earn if kept safe. That's **INR 2,30,85,220** today. 4. **Add loans** that would need clearing: **INR 40 lakh**. 5. **Add big goals** in today's money, such as children's education and weddings: **INR 30 lakh**. Total need: **INR 3,00,85,220**. 6. **Subtract existing life cover** (INR 30 lakh) and savings the family could use (INR 10 lakh, not counting the home they live in). New cover needed: **INR 2,60,85,220**. 7. **Round up** to a standard sum assured: **INR 2.75 crore**, for a policy that runs to age 60. If the INR 30 lakh of existing cover is an employer group policy, think twice before subtracting it. Group cover usually ends the day you leave the job. Leave it out and the need becomes INR 2,90,85,220, or **INR 3 crore** rounded. ## A second example: early career A 28-year-old with a INR 10 lakh take-home, no loans, INR 2 lakh of savings and parents who will depend on them, with INR 10 lakh of future goals: the family's share is INR 7.5 lakh a year for 32 years, worth **INR 1,69,97,447**. Add the goals, subtract savings, and the need is **INR 1,77,97,447**, rounded to **INR 2 crore**. That's 18 times income for someone with no loans. The long runway of working years is what makes it large, and it's also why buying early makes sense: premiums are set by age and health at the time you buy, and stay fixed for the policy term. ## How long the policy should run Cover is needed until your family no longer depends on your income: usually your planned retirement age, or until the youngest child is independent and the home loan is gone, whichever is later. Cover to 60 or 65 suits most salaried people. Policies that run to 85 or 99 cost more and protect years when, if your plan works, your retirement savings should be doing the job. That extra cost could go into those savings instead. ## When to review, and how to add cover Your need changes with life. Recheck the number at each of these moments: - **Marriage or a child.** The family's share of income and the goals both jump. - **A new home loan.** Add the full outstanding amount, especially if your spouse is a co-borrower. - **A big rise in income.** Your family's standard of living rises with it. - **Loans paid off or children independent.** The need falls; you can let a smaller policy lapse. When the need rises, buy an additional policy rather than replacing the old one: the old premium was set when you were younger. Some people also ladder cover. For the INR 2.75 crore example, a INR 1.5 crore policy to age 60 plus a INR 1.25 crore policy that ends when the home loan and children's education are done covers the expensive years and costs less than one large policy to 60. ## Edge cases - **Both partners earn.** Each should be insured for the income the other and the children would lose. Don't size one policy for the household. - **A homemaker spouse.** There's no salary to replace, but childcare, cooking and running the home would cost real money. Insurers may cap cover for non-earning spouses; it's still worth pricing. - **Parents who depend on you.** Count their support in the family's share of income, for as many years as it's likely to be needed. - **Loans with a co-borrower.** If your spouse is a co-borrower, they inherit the full EMI. Count the whole outstanding balance. - **Income that will rise sharply.** Doctors finishing training or founders before a salary kicks in may want to recheck the number every few years and add a policy as income grows. - **Disclose everything.** Smoking, existing conditions and other policies must be declared. Non-disclosure is the most common reason claims are disputed. ## Term insurance vs investment-linked policies Endowment, money-back and unit-linked policies combine insurance and investment, and usually provide far less cover for the same premium. Pure term insurance pays only on death, which is why it's cheap enough to buy the cover a family actually needs. If you have an investment-linked policy, check its actual sum assured: it's often a fraction of the number worked out above. In the old regime, term premiums count toward the INR 1.5 lakh 80C limit. [Free tool**Term insurance calculator**A term policy should leave your family able to live as they do now, clear the loans and still fund the big goals. This calculator works out that amount from your own numbers instead of a rough multiple of salary.](/tools/term-insurance-calculator)[Free tool**Health insurance cover calculator**Hospital bills depend on where you get treated, how old you are and how many people share the policy. This guide turns those into a suggested sum insured and shows how far your current cover falls short.](/tools/health-insurance-cover-calculator)[Free tool**Net worth calculator**Your net worth is everything you own minus everything you owe. Fill in the assets and loans Indian households usually hold to see the number, how it is spread and how much of it you could actually use.](/tools/net-worth-calculator)[Free tool**Child education planner**College fees in India have been rising far faster than general prices. Enter today's cost of the course you have in mind and your child's age to see the future bill and the monthly investment that covers it.](/tools/child-education-planner)[Free tool**Emergency fund calculator**An emergency fund pays the bills if your income stops or a big unplanned cost lands. This calculator sizes yours from your essential spending, EMIs and how steady your income is, and shows a simple way to park it.](/tools/emergency-fund-calculator) **Where Kosh fits** Kosh reads your statements, sees your real income, loans and savings, and works out a cover number from them. It doesn't sell insurance, earns no commission from insurers and never recommends a specific policy. ## Frequently asked questions How much term insurance should I buy? Enough to replace your family's share of your income until you'd have stopped working, plus your outstanding loans and big goals, minus existing cover and usable savings. For a 32-year-old with a INR 15 lakh take-home, a home loan and children, this can be close to 20 times income. Is 10 times my income enough term cover? Often not. It ignores how many working years you have left and how much you owe. A younger person or anyone with a large home loan usually needs 15 to 20 times take-home income or more. Till what age should I take term insurance? Until your family no longer depends on your income, which for most people means your planned retirement age, around 60 to 65. Cover beyond that costs more and protects years your retirement savings should cover. Should I count my employer's group life cover? Be cautious. Group cover usually ends when you leave the job, which may be when you're older and premiums are higher. Many people count none or only part of it. Do I need term insurance if I am single? Not if nobody depends on your income and no one else would have to repay your loans. If you support parents or have a co-signed loan, you do. Buying early locks in a lower premium for the whole term. Is the term insurance premium tax deductible? In the old regime, life insurance premiums count toward the INR 1.5 lakh section 80C limit, now section 123 of the Income-tax Act, 2025. There is no deduction in the new regime. Written by the Kosh team and checked against the rules in force on 25 October 2026. This guide is general information, not tax, legal or investment advice. Kosh is an educational financial planning tool by Primedepth Labs. It is not a SEBI-registered investment adviser and does not offer personalised investment advice, hold your money or execute trades. Markets carry risk; read scheme documents carefully and consult a registered adviser before acting. ## Upload your statement and Kosh does this for you. Kosh reads your bank and card statements, works out your tax under both regimes and turns guides like this one into your own numbers and next steps. 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