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Term Insurance Calculator (Pure Risk Life Cover)

Calculate your ideal term insurance sum assured and estimate your annual or monthly premium. Recommends income protection multipliers based on your current age, liabilities, and lifestyle under IRDAI underwriting guidelines.

For a 30-year-old earning ₹12,00,000 with a ₹25,00,000 home loan, the recommended life cover is ₹2,60,00,000 (20x income + debts), costing approx ₹26,687/year in pure term premium.

Applicant Profile & Income

Calculate your recommended pure term insurance life cover and estimate annual premiums.

₹
years
years

Typically until planned retirement (60 or 65).

₹

Home loan, car loan, personal debts to clear.

₹

Active retail term plans or corporate covers.

Recommended Protection20x Income Multiplier

Recommended Sum Assured

₹2,60,00,000

Estimated Premium: ₹26,687/year (₹2,313/month)

Policy Duration

35 Years

Covered till age 65

Income Protection

₹2,40,00,000

20x Annual Income

Sec 80C Tax Saving

₹8,326

Annual tax deduction

Death Benefit Tax

100% Tax-Free

Section 10(10D)

Underwriting Guidelines:

  • Recommended life cover of ₹260 Lakhs (20x annual income + liabilities).
  • Policy coverage until age 65 (35 years duration) covers your peak earning and liability years.
  • Premiums qualify for deduction under Section 80C, saving up to ₹8,326/year in taxes.

Recommended Cover

₹2,60,00,000

Estimated Premium: ₹26,687/yr
Premiums are indicative based on median IRDAI private and public life insurer rate charts.
What it is:
An Indian pure term life insurance sum assured and premium estimator.
What it calculates:
Recommended sum assured, estimated monthly/annual premiums, and Section 80C tax savings.

Key Assumptions

  • Income multiplier follows IRDAI actuarial age brackets.
  • Sum assured rounds to the nearest ₹5 Lakhs.
  • Premiums reflect non-smoker / smoker actuarial loading.

How it works

Income Multiplier Rule: Actuarial underwriting in India recommends a minimum cover of 20x annual income for individuals under 35, 15x for ages 36–45, and 10x for ages 46–55.

Liability Add-on: Outstanding home loans, vehicle loans, and personal loans are added to the base cover so that liabilities do not burden your surviving dependents.

Actuarial Pricing: Pure term insurance offers the highest cover at the lowest cost because it covers pure risk with no investment return component. Non-smokers and women receive significant premium discounts.

Section 80C & 10(10D): Premiums are deductible up to ₹1,50,000 under Section 80C. The death benefit received by nominees is 100% tax-free under Section 10(10D).

Formula

Recommended Term Cover = (Annual Income × Age Multiplier) + Outstanding Debts - Existing Life Covers

Multiplier
= 10x to 20x annual income depending on age
Debts
= Home loan, car loan, and unsecured personal liabilities
Existing Cover
= Active corporate or retail life policies currently in force

Locking in a term plan at an earlier age fixes your low annual premium for the entire policy tenure (up to age 60–65).

Example calculation

Age 30 Non-Smoker with ₹12L Income & ₹25L Home Loan

Recommended Income Multiplier
20x Annual Income
Base Income Protection Cover
₹2,40,00,000
Outstanding Debts Added
₹25,00,000
Recommended Sum Assured
₹2,60,00,000
Estimated Annual Premium (incl. GST)
₹26,687
Section 80C Annual Tax Deduction
₹8,326

Frequently asked questions

What is the right age to buy a term insurance policy?
The ideal time to buy term insurance is in your 20s or early 30s. Term insurance premiums remain fixed for the entire duration of the policy. A 25-year-old non-smoker pays roughly ₹8,000–₹10,000/year for ₹1 Crore cover, while a 40-year-old pays almost double for the same policy.
Should I buy a Return of Premium (TROP) term plan?
Almost all financial planners advise against Term Return of Premium (TROP) plans. TROP premiums are 2x to 3x higher than standard pure term insurance. The refund of premiums after 30 years yields a dismal return of 2%–3% p.a., severely trailing inflation. It is far better to buy pure term insurance and invest the saved premium difference in mutual funds or PPF.
Till what age should I take term insurance coverage?
You should only take coverage until your planned retirement age (typically age 60 or 65). Beyond age 60, children become financially independent, debts are cleared, and you have accumulated your retirement corpus. Whole life term plans (up to age 85 or 100) are expensive marketing gimmicks.

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Reviewed by Pradipta Ray, Editor · Updated