Will today’s life insurance amount be enough after 20–30 years?

Imagine finding an old newspaper from 2005. You look at the property ads and see a 2BHK in a metro city listed for ₹20 Lakhs. You laugh in disbelief because today, that same apartment costs ₹1.5 Crore.

That is the power of inflation. It eats money for breakfast.

Now, apply this same logic to your Life Insurance.

When you buy a policy today, the "Sum Assured" (e.g., ₹1 Crore) looks like a fortress of safety. It feels like a fortune. But life insurance is a long-term contract. You are buying a safety net for a tragedy that might happen 20 or 30 years from now.

If you pass away in 2045, your nominee will receive ₹1 Crore. But in 2045, will that ₹1 Crore be enough to pay for a college degree, a wedding, and 20 years of household expenses?

The math says No.

In this guide, we will break down the Time Value of Money and show you how to stop your insurance from "expiring" before you do.

The short answer: Probably not, unless you "Inflation-Proof" it.

If you buy a flat ₹1 Crore term plan today, its real value (purchasing power) will shrink drastically over two decades. At a standard 6% inflation rate1, ₹1 Crore in the year 2045 will buy you goods worth only about ₹31 Lakhs in today's money. To ensure your family is truly protected, you must account for this "Silent Killer" by choosing an Increasing Term Plan or reviewing your coverage every 3-5 years.

The "Ice Cube" Effect: How Money Melts

Money has no fixed value; it only has purchasing power.

Every year, inflation reduces what ₹100 can buy.

Let’s look at the cold, hard numbers. If average inflation is 6%1 per year, here is what a ₹1 Crore policy bought today will actually be worth in the future (in terms of today’s buying power).

The Shocking Truth:

If you die in 30 years, the ₹1 Crore cheque your family receives will feel like receiving ₹17 Lakhs today. It won't even cover basic retirement needs.

The "Two-Speed" Inflation Problem

The table above assumes 6% general inflation1 (milk, bread, petrol). But as a parent, your biggest future liabilities aren't milk and bread. They are Education and Healthcare. These two sectors have a "personal inflation rate" that is much higher than the general economy.

1. Education Inflation (~11-12%)¹:

• Cost of an Engineering Degree today: ₹15 Lakhs.
• Cost in 15 years: ₹60 - ₹70 Lakhs.
• Impact: Your insurance cover needs to triple just to keep up with school fees.
  
  

2. Medical Inflation (~14%)²:

• If your spouse needs medical care in their old age (funded by the insurance money), the cost will be astronomical compared to today.

The Bottom Line: If you calculated your Human Life Value (HLV) based on today's costs, you are already under-insured for tomorrow's reality.

The Solution: How to "Future-Proof" Your Policy

You don't need a crystal ball to fix this. You just need the right product structure. Here are the three ways to ensure your cover stays relevant.

Option 1: The "Increasing Term Plan" (Highly Recommended)
This is the "Set and Forget" solution.

When buying a policy from ABSLI (like the Life Shield Plan), look for the Increasing Sum Assured option.

• How it works: You buy a ₹1 Crore policy today. Every year, your cover automatically increases by 5% or 10% (simple interest) without any new medical tests or paperwork.
• The Result: By the 20th year, your ₹1 Crore cover has automatically grown to ₹2 Crore or ₹3 Crore.
• Why it wins: It fights inflation on autopilot. Even if you forget to review your finances, your safety net is growing in the background.
  
  

Option 2: The "Life Stage" Upgrade
Many ABSLI term plans come with a feature called Life Stage Benefit.

This allows you to manually increase your cover at specific milestones without medical checks.

• Get Married: Increase cover by 50%.
• 1st Child: Increase cover by 25%.
• 2nd Child: Increase cover by 25%.
• Home Loan: Increase cover to match the loan.

Strategy: Use these milestones to "top up" your protection every few years.

Option 3: The "Laddering" Strategy
If you already bought a fixed plan 5 years ago, don't cancel it. Ladder a new one on top of it.

• 2020: Bought ₹1 Crore policy.
• 2025: You realize it's not enough. Buy a new separate policy for another ₹1 Crore.
• 2035: Buy another ₹50 Lakh policy if needed.

Result: You build a pyramid of coverage that grows with your age and income.

Don't Forget: Your Assets are Growing Too

There is a silver lining.

While inflation erodes your insurance value, your Investments (Mutual Funds, PPF, EPF) should be growing.

The "Intersecting Lines" Theory:

• Line A (Insurance Need): Goes DOWN as you age (kids finish college, loans are paid off).
• Line B (Asset Base): Goes UP as you save more.

Ideally, by the time your ₹1 Crore policy loses its value (in 20 years), your personal savings (Mutual Funds + Real Estate) should have grown to ₹5 Crore.

• At Age 30: You are "Insurance Dependent" (High Need).
• At Age 55: You should be "Self-Insured" (High Assets).

The Risk: The danger zone is the middle years (Age 35-50) where liabilities are high, assets are low, and inflation has already eaten 50% of your policy's value. This is where an Increasing Term Plan saves you.

Checklist: Is your cover inflation-ready?

Use this simple 3-minute audit to see where you stand.

Final Thoughts

Money is an illusion. ₹1 Crore is just a number; what matters is what it can do.

Buying a flat cover and hoping it lasts 30 years is like packing a lunchbox for a 30-year journey. It won't last.

The smartest move you can make today is to acknowledge that life gets more expensive.

Don't just buy insurance for today's you. Buy it for the future version of your family who will need to pay 2045 prices. Opt for an Increasing Term Plan with ABSLI, it’s the small tick-box that makes a massive difference.