How much term life insurance a family needs
Sizing term life insurance is where most households either overpay or under-protect. Ten to fifteen times annual income, plus outstanding loans, plus known future costs like education.
The sizing rule
Ten to fifteen times annual income, plus outstanding loans, plus known future costs like education.
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 — term life insurance 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 term life insurance cover?
A lump sum to your family if you die during the policy term. No maturity value, which is exactly why it is cheap.
How much cover should we take?
Ten to fifteen times annual income, plus outstanding loans, plus known future costs like education.
What happens if it lapses?
Premiums are level for the whole term; the danger is a missed payment lapsing a policy you cannot easily replace at the same price.