Do I need life cover if no one depends on my income?

No. A single person with no dependants and no co-signed loans needs none. Buy it when someone would be worse off without your income, and buy young because the premium is fixed at the age you start.

Does my employer's group cover count?

Count it, but do not rely on it: it is typically one to three times salary and ends the day you leave. Size your own policy so that the family is covered if you are between jobs or self-employed.

Why discount the income stream?

Because a lump sum paid today can be invested. Replacing ₹8 lakh a year for 25 years does not need ₹2 crore; at a safe 7% it needs the present value, about ₹1.2 crore with salary growth included. The discount rate should be a safe return, not an equity return.

Are the premiums and the payout taxed?

Premiums qualify under Section 80C in the old regime. The death benefit is tax-free under Section 10(10D) with no limit for pure term plans. Survival benefits on high-premium traditional or ULIP policies can be taxable since 2023, which is one more reason to keep insurance and investment apart.

Should the cover run to 60 or beyond?

To the age your dependants would stop needing your income, usually your retirement age. Cover to 80 or 'whole life' costs far more for years when your savings should already be doing the job.

Term insurance cover calculator

How much term insurance do I actually need?

Term cover to buy

₹2.25 Cr

₹2.2 Cr needed, rounded up to the next ₹25 lakh · 18.3× income before offsets

How it adds up

Replace 70% of income to 60 (25 years): ₹2,19,93,377
Loans to clear: ₹0
Lump sums still ahead: ₹0
Liquid assets and cover in force: ₹0
Cover needed: ₹2,19,93,377

Rule of thumb: 10× income

A sanity check, not a method

Rule of thumb: 15× income

Fits a 35-year-old with average savings

How this is calculated

Rules checked against their sources on 29 September 2026. Tax year FY2026-27.

What life insurance is for

Life cover replaces the income a family loses if the earner dies. That is the whole job. It is not an investment, not a tax plan, and not something a person without dependants needs. Sized right, it is one of the cheapest financial products in India; sized by a salesperson, it is one of the most expensive.

The human-life-value method

Start with the income the family would need each year: not all of it, since the earner's own spending stops, but typically 60% to 75%. Count the years until the earner would have retired anyway, let the income grow as a salary would, and discount the stream at the rate a widow or widower could safely earn on a lump sum. That present value is the income-replacement need.

Add what the family would still owe or still need: loans that should not outlive the earner (a home loan above all), and lump sums ahead such as college fees and weddings. Subtract what already exists: liquid assets, EPF and other savings the family could use, and cover already in force, including the group term cover from an employer (with the caveat that it ends with the job). What remains is the cover to buy, rounded up to the round sums policies come in.

The rules of thumb

"Ten times income" and "fifteen times income" are quick checks. They fit a 35-year-old with average savings and no large loans, and fail for a 55-year-old with five working years left (too much) or a 30-year-old with a ₹1 crore home loan and two toddlers (too little). Use the method; glance at the multiple.

Buying it

Buy pure term insurance: a fixed sum paid on death, nothing back on survival, for a level premium until 60 or 65. A healthy 35-year-old non-smoker pays roughly ₹10,000 to ₹15,000 a year for ₹1 crore. Disclose everything on the proposal form, especially smoking and existing conditions; after three years of premiums the insurer cannot contest a claim except for fraud. Avoid endowment, money-back and unit-linked plans: they bundle a small cover with a poor investment at a high cost. Riders for accidental death and critical illness are optional; a waiver-of-premium rider is cheap and useful.

Review it

Cover needs change: a new loan, a child, a spouse who stops working, a large rise in income. Re-run this page at each of those; adding a second policy is easy, and the need falls as savings grow and the years to retirement shrink.

Questions people ask

Do I need life cover if no one depends on my income?: No. A single person with no dependants and no co-signed loans needs none. Buy it when someone would be worse off without your income, and buy young because the premium is fixed at the age you start.
Does my employer's group cover count?: Count it, but do not rely on it: it is typically one to three times salary and ends the day you leave. Size your own policy so that the family is covered if you are between jobs or self-employed.
Why discount the income stream?: Because a lump sum paid today can be invested. Replacing ₹8 lakh a year for 25 years does not need ₹2 crore; at a safe 7% it needs the present value, about ₹1.2 crore with salary growth included. The discount rate should be a safe return, not an equity return.
Are the premiums and the payout taxed?: Premiums qualify under Section 80C in the old regime. The death benefit is tax-free under Section 10(10D) with no limit for pure term plans. Survival benefits on high-premium traditional or ULIP policies can be taxable since 2023, which is one more reason to keep insurance and investment apart.
Should the cover run to 60 or beyond?: To the age your dependants would stop needing your income, usually your retirement age. Cover to 80 or 'whole life' costs far more for years when your savings should already be doing the job.

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