How much critical illness cover a family needs
Sizing critical illness cover is where most households either overpay or under-protect. Two to three years of income, because the real loss is the earning gap and the lifestyle changes, not just the hospital bill.
The sizing rule
Two to three years of income, because the real loss is the earning gap and the lifestyle changes, not just the hospital bill.
Adjusting it for your household
Rules of thumb are starting points. A single-earner family with young children and a home loan needs more than a dual-income household with no dependants. Count what would still have to be paid if the worst happened — EMIs, school fees, living costs — and size the cover against the gap, not against a formula.
Reviewing it as life changes
Marriage, a child, a home loan, a job change, a parent moving in — each of these changes the number. A cover level set once and never revisited is usually wrong within five years.
Where FamTally comes in
FamTally holds every policy the family has — critical illness cover included — with sum assured, premium, frequency, renewal date and the members it covers. It totals your cover so gaps are obvious, puts premiums into your monthly cashflow, and reminds you ahead of each renewal. Free to use.
Stop doing this in a spreadsheet
FamTally keeps your loans, income, expenses, assets, insurance and goals in one place, forecasts five years ahead, and answers questions about your own numbers. Free, and built for Indian families.
Start freeQuestions people ask
What does critical illness cover cover?
A lump sum on diagnosis of a listed condition, paid regardless of what the treatment cost.
How much cover should we take?
Two to three years of income, because the real loss is the earning gap and the lifestyle changes, not just the hospital bill.
What happens if it lapses?
Annual, with a survival period clause worth reading before you assume you are covered.