India has a massive insurance gap. Most families are severely underinsured. The question is not just "do you have insurance" but "do you have enough?"
The Human Life Value (HLV) Method
The most accurate method:
HLV = Annual Income x Working Years Remaining x 0.65
Example: 35-year-old earning Rs 8 lakh/year, retires at 60: HLV = Rs 8 lakh x 25 years x 0.65 = Rs 1.3 crore
This person needs at least Rs 1.3 crore of life insurance.
The Simple Rule
Minimum Life Cover = 10x your annual income
Rs 5 lakh/year income - Rs 50 lakh minimum cover Rs 10 lakh/year income - Rs 1 crore minimum cover Rs 20 lakh/year income - Rs 2 crore minimum cover
Most Indians I meet have Rs 5-10 lakh of LIC coverage against incomes of Rs 8-12 lakh. That is a dangerous gap.
Adding Up Your Actual Need
- ▸Replace income for 10-15 years: Rs 6 lakh/year x 12 years = Rs 72 lakh
- ▸Pay off home loan: Rs 25 lakh
- ▸Children's education (2 children): Rs 20 lakh
- ▸Emergency buffer: Rs 5 lakh Total: Rs 1.22 crore - minus your existing Rs 20 lakh LIC cover = gap of Rs 1.02 crore
Cost of Rs 1 Crore Term Insurance
Age 30: approximately Rs 7,000-8,500/year for LIC Jeevan Amar (30-year term) Age 35: approximately Rs 9,000-11,000/year Age 40: approximately Rs 13,000-16,000/year
Every year you delay costs money. Calculate your insurance need with our life insurance calculator or call Ajay Kumar Poddar at 9415313434.
