Question 1

How much life insurance do I need in India?

Accepted Answer

Use the 10–12× annual income rule as a floor, then refine with this calculator: cover family expenses (inflation-adjusted) for 20–30 years, clear all debts, fund child education and marriage, then subtract existing investments and current cover. The tool runs both the needs-based and Human Life Value methods automatically.

Question 2

What is the Human Life Value (HLV) method?

Accepted Answer

HLV is the present value of your future earnings that your family depends on. It is your annual income × working years remaining, discounted at a reasonable rate, with only the dependent share (typically 60–70%) counted. Term cover should at least match this.

Question 3

What is the best life insurance: term, ULIP, or endowment?

Accepted Answer

Pure term insurance gives the highest cover for the lowest premium and is best for most people. ULIPs and endowment plans mix investment with cover but earn far less than index funds and charge higher mortality costs. Buy term, invest the difference.

Question 4

How much does ₹1 crore term insurance cost?

Accepted Answer

Indicatively: ₹1 Cr cover for 30 years at age 30 costs about ₹1.0–1.2 lakh per year ten years ago, but today roughly ₹10,000–14,000 per year in India (non-smoker, good health). Premiums rise sharply with age — buying at 25 vs 40 can halve or double the cost.

Question 5

Is term insurance premium tax-deductible?

Accepted Answer

Yes, under Section 80C of the old regime — premiums on term, endowment and unit-linked plans qualify within the overall ₹1.5 lakh 80C limit. The new regime gives no deduction for insurance premiums.

Question 6

When should I buy term insurance?

Accepted Answer

As soon as someone depends on your income — marriage, a child, or a home loan are the triggers. The younger and healthier you are, the cheaper the premium. Lock in 25–35 year cover to protect through your earning years.

Question 7

Should term cover include critical illness?

Accepted Answer

Yes, if budget allows. A critical illness rider pays a lump sum on diagnosis (cancer, heart attack, stroke) and covers treatment costs your health insurance may not. Compare riders across insurers — they add roughly 15–30% to premium.