How Much Term Insurance
Do You Actually Need?

The Underinsurance Problem

Professional earning ₹18L/year with a family of 3 typically carries ₹50 lakh term cover. Sounds like "enough," right? Wrong. Actual requirement: ₹1.5-2.5 crore. Gap: ₹100 lakh underinsured.

The problem: most people guess. They buy what insurance agents recommend, which is 5-10x their annual salary. That formula is outdated for Indian inflation and liabilities.

The Real Formula

Three Coverage Components

1. Income Replacement (10 years): Family's living expenses without your income. Typically 50-70% of your current spend.

2. Liability Cover: Home loan, education loans, any outstanding debts.

3. Goal Fund: Child's education, down payment on second property, parent support.

Pro Tips

• Buy term young (age 25-30): ₹25-30/month per ₹1 crore cover
• Review every 5 years as liabilities change
• Don't buy from agent; buy online or via Artha-IQ (50% cheaper)
• Consider family's post-tax spending, not pre-tax income
• If married couple both earning: buy term for both, not just breadwinner