Think through coverage amount, dependents, liabilities and policy duration.
Who Needs It
Anyone whose income supports others, such as a spouse, children or parents, or who has loans the family would have to repay, should consider term cover. Someone with no dependents and no shared debts may not need it yet.
Estimate Need
Consider annual household expenses, outstanding loans, children's goals and existing assets.
Avoid choosing cover only because of a round number.
A simple method: yearly household expenses multiplied by the years your family would need support, plus outstanding loans and major goals, minus savings that could be used. Example: ₹6 lakh a year for 15 years is ₹90 lakh; add a ₹40 lakh home loan and ₹20 lakh for a child's education, subtract ₹15 lakh of savings, and the need is about ₹1.35 crore.
Rules of thumb such as 10 to 15 times annual income are a quick cross-check, but your own expenses and liabilities matter more. Don't treat employer group cover as permanent, because it usually ends when you leave the job.
Choose The Term
Cover should usually run until your dependents are financially independent and major loans are repaid, often until around 60 or 65. Buying younger generally locks in a lower premium for the whole term.
Check Policy Fit
Look at claim settlement process, exclusions, premium affordability and term length.
Keep nominees and documents updated.
Disclose health conditions, smoking and existing policies honestly; non-disclosure is a common cause of claim disputes. Riders such as accidental death or critical illness add cost, so add them only if they fill a real gap.
Under the GST 2.0 changes effective 22 September 2025, premiums on individual life insurance policies are exempt from GST, so a quote shouldn't add GST on top. Under the old regime, premiums can count within the ₹1.5 lakh 80C limit.
Avoid Common Traps
Return-of-premium and endowment-style policies cost much more for the same cover; comparing them with plain term cover plus a separate investment shows the trade-off clearly. If you want the payout protected for your spouse and children, ask about a policy under the Married Women's Property Act.
Review Over Time
Marriage, children, home loans and income changes can alter required cover.
Use the Take-Home Salary Calculator and Budget Planner to see how much premium your monthly budget can carry, and the Home Loan Calculator to check the outstanding balance your cover should protect.