What is Life Insurance Coverage Calculator?
Calculate the right life insurance coverage amount for your family based on income, liabilities, and future goals Simply enter your values, and the calculator instantly computes accurate results using standard financial formulas. All calculations are performed entirely in your browser — nothing is stored or transmitted.
Formula Used
Human Life Value method: 10-20× annual income. DIME method: sum of Debt (all loans), Income replacement (years × annual income), Mortgage (home loan), Education (children's future costs). Choose the higher of the two estimates.
How to Use This Calculator
- Enter your current annual income
- Enter all outstanding loans (home loan, personal, car)
- Enter number of years family needs income support (until youngest child is independent)
- Enter future goals (children's education, marriage corpus)
- Click Calculate to see minimum cover recommended using both methods
Worked Example
Income: ₹12L/yr | Home Loan: ₹40L | Personal Loan: ₹5L | 15 yrs income: ₹1.8Cr | Education: ₹25L → Total Cover Needed: ₹2.7 Crore | Term premium at 35 yrs: ~₹25,000/yr
Why Use This Tool?
- Ensure family is financially protected in your absence
- Avoid under-insurance — common mistake in India (average cover is only 8× income)
- Calculate exact cover needed based on your specific liabilities and goals
- Compare term insurance premium at calculated cover amount
Frequently Asked Questions
How much life insurance cover do I need?
Financial advisors recommend 10-15× your annual income as a minimum. Add all outstanding loans, and factor in children's education and marriage costs. Subtract existing assets (savings, investments). For example, ₹12L annual income needs ₹1.2-1.8 Cr cover — plus loans and goals.
Why is term insurance better than endowment or ULIP?
Term insurance gives the highest cover for the lowest premium. A 35-year-old can get ₹1 crore term cover for ₹10,000-15,000/year. The same ₹1 crore in endowment/ULIP costs ₹1-2 lakhs/year with poor returns. "Buy term and invest the rest" in mutual funds is the proven strategy.
At what age should I buy life insurance?
Buy as early as possible — at 25-30 years when premium is lowest and health is best. A ₹1 crore term plan costs ~₹8,000/year at 25 but ₹18,000/year at 40. Buy when you have dependents (spouse, children, aging parents) or financial liabilities (loans).
Explore more retirement & goals calculators or try our other free financial tools.