How much personal accident cover a family needs
Sizing personal accident cover is where most households either overpay or under-protect. Ten times annual income is a common benchmark, and it is inexpensive relative to what it covers.
The sizing rule
Ten times annual income is a common benchmark, and it is inexpensive relative to what it covers.
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 — personal accident 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 personal accident cover cover?
Death and disability from accidents, including the permanent disability that health insurance does not compensate for.
How much cover should we take?
Ten times annual income is a common benchmark, and it is inexpensive relative to what it covers.
What happens if it lapses?
Annual, and often bundled cheaply with a bank account or credit card — worth checking what you already have.