How Much Life Insurance Do You Really Need?

Buying life insurance is a smart financial decision, but one important question always comes up:
“How much life insurance coverage should I take?”

Whether it’s ₹25 lakh, ₹50 lakh, ₹1 crore or more—it depends on your income, responsibilities, loans, and future goals.
This guide will help you calculate the right life insurance amount.

1. Why the Right Coverage Matters

Many people choose low coverage because it’s cheaper, but it may not protect the family fully.
Your life insurance should cover:

• Monthly household expenses
• Child education
• Loans & debts
• Future inflation
• Emergency needs

2. The Simple Rule: 20× Your Annual Income

Insurance experts follow a simple formula:

Example:

If you earn ₹6,00,000 annually:
Coverage = 6,00,000 × 20 = ₹1.2 Crore

3. Add Loans + Future Goals

To calculate the ideal amount, include:

• Annual Income × 20
• Total loans (home, car, personal loan)
• Future goals like child education, marriage, etc.

4. Consider Inflation

Inflation increases expenses every few years.
If your family needs ₹30,000 per month today,
they may need nearly ₹50,000 per month after a decade.

This is why most people today choose a cover of ₹1 crore to ₹2 crore.

5. Coverage Based on Age

6. Don’t Forget Riders

Add these riders to enhance your protection:

• Critical Illness Rider
• Accidental Death Benefit Rider
• Waiver of Premium Rider

7. Common Mistakes to Avoid

• Choosing low coverage like ₹20–30 lakh
• Buying life insurance only for tax saving
• Not adding riders
• Not updating coverage after marriage or kids

8. Example Calculation

Person Details:

• Age: 32
• Annual Income: ₹6,00,000
• Loans: ₹20 lakh
• Future Goals: ₹25 lakh (child education)

9. Final Recommendation (Thodu Insurance)

For most working individuals in India:
₹1 crore to ₹2.5 crore coverage is ideal.

It ensures your family’s:

• Daily expenses
• Child education
• Loans repayment
• Long-term financial security

If you want a perfectly calculated amount based on your income,
family size, loans, and goals — Thodu Insurance can help you choose
the right plan.