Personal finance · Insurance Planning
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Income × 14 = your life cover. That's the rule. A ₹15L salary needs ₹2.1 crore of term cover. Most people buy ₹50L because the premium is cheap. That's 3× income, which leaves a family broke in 4 years. Run the calculator and get the right number.
Sec 123 (old 80C); Sec 11 (old 10(10D)); IRDAI
Why income × 14: Family needs 10-15 years of income replacement. Plus inflation buffer. Plus loan payoff. 14× = average of conservative (10×) and aggressive (20×) multiples used globally. The cheapest insurance decision you'll ever make: ₹1Cr term plan for a 30-year-old = ₹8,000-12,000/year. That's ₹700-1,000/month. Costs less than Netflix. Protects everything. Pure term, not ULIP: Term = protection only. ULIP = insurance + investment + 2-4% annual charges. Over 20 years: term + separate MF investment beats ULIP by ₹40-60L. Always buy term for insurance needs. Increasing cover with age: Buy at 30 for maximum tenure. Add cover (separate policy) at 35 if income grows significantly. Two policies fine. Don't lapse first, new policy at 35 costs 40% more. Sec 123, Income-tax Act 2025 (old Sec 80C): Premium paid on life insurance (self, spouse, children): deduction up to ₹1.5L.
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