Employee money guide

How Much Term Insurance Do I Need?

Estimate term insurance needs using income, loans, dependents, education goals, and existing assets.

Direct Answer

Term insurance cover should broadly account for family expenses, loans, children’s education, long-term dependents, and existing assets. A common shortcut is 10-15 times annual income, but needs-based planning is better.

Key Takeaways

Term insurance protects dependents, not investments.
Loans and children’s education can raise cover needs.
Review cover after marriage, children, home loans, or income changes.

Needs-based estimate

Add family living costs, outstanding loans, major goals, and dependents’ needs, then subtract existing assets meant for those goals.

Common mistakes

Do not mix investment returns with protection needs. Avoid buying cover only because of tax benefits.

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FAQs

Does everyone need term insurance?

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People with financial dependents or significant loans usually need to evaluate term insurance seriously.

Reviewed by the Saventh Financial Literacy Team. Educational information for Indian employees — not personalised advice. Mutual fund investments are subject to market risk. Saventh AMFI ARN 324457.

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