The Human Life Value Method
A simple way to calculate adequate term cover: multiply your current annual income by 15–20. If you earn ₹15 lakh annually, your minimum cover should be ₹2.25–3 crore. Add any outstanding loans (home loan, car loan) and deduct existing savings/investments to arrive at the net insurance need.
When Did You Last Review?
Most Indians buy term cover once and never revisit it. If you bought a ₹1 crore policy in 2015, inflation and lifestyle growth means your real need may now be ₹2–2.5 crore. Adding a new home loan without increasing cover is the most common underinsurance trap.
Cost of Adding Cover
Adding a ₹1 crore term policy at age 35 costs ₹8,000–12,000 per year from reputable insurers. Premiums are locked in at the time of purchase, so buying additional cover sooner is always cheaper than waiting. If you have employer group insurance, don't count it — it disappears when you change jobs.