Aakarsh Dalmia, CFP® professional · aakarshdalmia.com
AMFI-registered Mutual Fund Distributor · ARN-169845 · APMI-registered PMS Distributor · APRN-06803
Tool
How much life cover does your family actually need?
Not a multiple of salary picked off a poster. This uses the Human Life Value approach: the income your family would lose, brought back to today’s money, plus what they would have to settle, minus what is already in place.
It is the least glamorous calculation on this site and the one most portfolios get wrong.
Indicative cover requirement
₹0
- Income to replace
- ₹0
- Liabilities and goals
- ₹0
- Already covered
- ₹0
- Roughly, as income multiple
- 0×
What this is. An arithmetic illustration based entirely on the assumptions you type in. The rates are your assumptions, not forecasts, and not what any scheme will deliver. Change an assumption and the answer changes, which is rather the point of using it.
What this is not. It is not investment advice, not a recommendation, and not a projection of returns. It takes no account of your particular circumstances. Nothing is calculated on a server, and nothing you type here is stored or sent anywhere.
Why the usual rule of thumb fails
Ten times income is the number most people are quoted, and it is a reasonable opening guess that stops being reasonable the moment anything about your life is specific. A thirty-year-old with a young child and a large home loan needs far more than ten times. A fifty-five-year-old with no dependants, a paid-off house and a funded retirement may need almost nothing, because there is no income left to protect.
The two inputs people get wrong are their own consumption, which they leave out and so overstate the requirement, and their employer’s group cover, which they count on and which disappears on the day they change jobs or are asked to leave. Treat group cover as a bonus rather than a foundation.
One more thing the arithmetic cannot tell you: the right cover is worth nothing if the policy does not pay. Disclosure at the time of buying matters more than the premium you save, and an honest declaration of health, habits and income is the part that decides whether the claim is settled.
A number is a starting point, not a plan.
This tells you roughly where you stand. What it cannot tell you is what to do about it, which depends on your income, your dependants, what you already hold, and how you behave when markets fall. That part is a conversation.