Reviewed by Finin2min Editorial Desk · Last reviewed 11 August 2026
Estimate life cover from family expenses, liabilities, goals, emergency needs and existing financial assets/insurance.
Estimate life-cover need
This is a needs analysis, not an underwriting decision or product recommendation.
Total protection need
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Additional term cover gap
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Measure
Amount
Income-replacement corpus
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Liabilities and goals
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Assets and existing cover deducted
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Income-tax Act, 2025 note: The Section 80C premium deduction discussed above becomes Section 123 (read with Schedule XV) under the Income-tax Act, 2025, effective FY 2026-27. The Section 10(10D) maturity/death-benefit exemption continues to apply for FY 2025-26. It is being renumbered under the Income-tax Act, 2025 (effective FY 2026-27), but we could not verify the exact new section/rule number from a reliable source at the time of writing — check the current Income-tax Act, 2025 or a CA before citing a new section number for FY 2026-27 onward.
How This Is Calculated
This calculator estimates the term insurance cover needed using an income-replacement approach: it projects the present value of your family's future income need (adjusted for inflation and expected investment return) over the years until your income would otherwise have supported them, helping estimate a sum assured that could realistically replace your income if you're no longer there to earn it.
Frequently Asked Questions
How much term insurance cover do I need?
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A common rule of thumb is 10-15 times your annual income, but a more precise approach (like this calculator uses) projects the actual future income your family would need, adjusted for inflation and the returns that corpus could earn if invested — which can differ meaningfully from a flat multiple.
Is term insurance payout taxable?
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No. The death benefit (sum assured) paid to nominees under a term insurance policy is fully tax-free under Section 10(10D), provided the policy meets the conditions specified (primarily relevant for policies with an investment component; pure term plans almost always qualify).
Is term insurance premium tax-deductible?
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Yes, under the old tax regime — term insurance premiums qualify for deduction under Section 80C, within the overall ₹1.5 lakh 80C limit shared with other investments. This deduction is not available under the new tax regime.
Should term cover reduce as I get older?
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Many people's insurance need does decline over time as loans are paid off, corpus builds up, and dependents become financially independent — this is why some choose reducing cover (like a loan-linked term plan) instead of a flat sum assured for the entire policy term.
Source and review trail
Use the current official instrument, portal or regulator publication before acting.
Scope: Estimates the recommended term life insurance cover amount (sum assured), using standard needs-based methods — the Human Life Value (income-replacement) approach and/or an expense-and-liability-based approach.
Calculation logic
Human Life Value approach: estimate the present value of the insured's future income contribution to dependants, by discounting projected annual income (net of the insured's own consumption) over the remaining working years at an assumed discount rate.
Liability-and-goals approach: sum outstanding liabilities (home loan, other debt) + future family expense needs (until dependants become financially independent) + specific goal funding (children's education/marriage) − existing liquid assets/investments already earmarked for these needs, to arrive at the required cover.
Where both methods are computed, the calculator shows both figures so the user can compare and choose a cover amount, since neither method is a single universally 'correct' answer — they reflect different planning philosophies.
Inputs and assumptions
Income growth, discount rate and remaining working years used in the Human Life Value method are user-entered planning assumptions.
The liability-and-goals method depends on complete and accurate entry of all outstanding liabilities and future goal costs — an incomplete list of liabilities/goals will understate the recommended cover.
Exclusions and edge cases
This is a needs-estimation tool, not insurance advice — actual policy selection, underwriting, medical tests and premium quotes depend on the specific insurer and the insured's health/lifestyle factors, which the calculator does not access.
Does not itself recommend a specific insurer or policy — the output is a cover-amount estimate to use when shopping for a term plan.
Sources
No single official source applies — this is a needs-based planning estimate, not a statutory computation.
Review status: reviewed and approved by CA Nikhil Gupta on 13 July 2026.
Guides that use this calculator
Background, worked examples and the rules behind these numbers.