What is a Life Insurance Calculator?
Life insurance protects your family's finances if you are not around. The right cover depends on what your family would need, not on a fixed multiple of income.
This calculator estimates the cover needed using a needs-based method: your family's living expenses, loans and future goals, minus the cover and savings you already have.
How it helps you
- Estimate a cover amount based on your family's real needs.
- See how loans and goals add to the need.
- Find the gap between what you need and what you already have.
How it is calculated
Cover needed = PV(family expenses) + Loans + Goals − Existing cover − Savings
- PV(family expenses)
- Today's value of yearly expenses for the years of support, rising with inflation, with the payout earning a return
- Loans
- Outstanding loans that would need to be repaid
- Goals
- Future goals to fund, such as children's education
Yearly family expenses ₹6,00,000 for 20 years (6% inflation, 7% return), loans ₹20 lakh, goals ₹25 lakh, existing cover ₹50 lakh and savings ₹10 lakh.
- 1Living expenses need ≈ ₹1,09,92,019
- 2Total need = ₹1.10 Cr + ₹20 L + ₹25 L ≈ ₹1,54,92,019
- 3Less existing cover and savings of ₹60 lakh
Additional cover needed ≈ ₹94,92,019.
How to use the Life Insurance Calculator
- 1Enter your family's yearly expenses and how many years they would need support.
- 2Add outstanding loans and future goals.
- 3Enter existing life cover and savings.
- 4Set inflation and the expected return on the payout.
Frequently asked questions
Term insurance or investment-linked policies?
Term insurance usually gives the highest cover for the lowest premium because it is pure protection. Compare costs and features carefully before choosing.
Should I count my savings?
Yes, liquid savings and investments your family could use reduce the cover needed.
How often should I review my cover?
After major life events such as marriage, a child, a new loan or a big change in income.
Does this include health or accident cover?
No. This estimates life cover only. Health and accident insurance are separate needs.