Term Insurance Cover Calculator

This calculator estimates how much term life insurance cover you need using the Human Life Value (HLV) method — the present value of your future income your family would need to replace — alongside a simpler rule-of-thumb figure.

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Formula

Human Life Value is the present value of your future income stream (a growing annuity), adjusted for any existing cover/assets and outstanding liabilities:

PV = Annual Income × [1 − ((1+g)/(1+r))n] / (r − g)

where g is your expected income growth rate, r is the discount rate, and n is the number of years until retirement.

Recommended Cover = PV + Outstanding Liabilities − Existing Cover and Liquid Assets

The simpler rule of thumb — 10 times your annual income — is shown alongside for comparison, since many people find the HLV method's inputs harder to estimate confidently.

Worked Example

A 30-year-old earning ₹12,00,000/year, planning to work until 60, expecting 5% income growth and using a 7% discount rate, with no existing cover and no outstanding loans, gets a Human Life Value cover recommendation in the range of ₹2-2.5 crore — versus a simpler 10x-income figure of ₹1.2 crore.

How to Use

  1. Enter your current annual income.
  2. Enter your current age and the age you plan to retire or stop earning.
  3. Enter your expected income growth rate and a discount rate (a conservative long-term rate, often 6-8%).
  4. Enter any existing life cover or liquid assets, and any outstanding loans.
  5. Read both the Human Life Value recommendation and the simpler 10x-income figure.

Frequently Asked Questions

Why does the HLV method usually suggest more cover than the 10x-income rule?
Because HLV explicitly accounts for years of future income growth and a long working horizon, whereas the 10x rule is a rough heuristic that doesn't adjust for your specific age, income trajectory, or family's actual financial needs.
What discount rate should I use?
A conservative, long-term rate is typical u2014 often similar to what a relatively safe long-term investment might earn. A higher discount rate reduces the calculated cover; a lower one increases it, so this assumption meaningfully affects the result.
Should I include my spouse's income?
This calculator models one income stream at a time u2014 if you want to also cover a portion of household expenses reliant on a second income, run the calculation separately for that income too.
Does this account for inflation in future expenses?
Indirectly, via the income growth rate assumption u2014 but it doesn't separately model your family's future living costs. For a more expense-driven approach, use the Retirement Corpus calculator's methodology as a cross-check.
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