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Aditya Birla Sun Life Insurance Company Limited

How much Term Insurance do I need?

September 30, 2026

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Disclaimer : ABSLI Nishchit Aayush Plan (UIN No 109N137V12) is a non-linked non-participating individual savings life insurance plan.
^ Provided 0 year deferment & Annually in Advance payout frequency is chosen at the time of inception of the policy. Annually in Advance payout frequency is only available in "Annual" premium payment mode. ^*Male- 25 yrs invests in ABSLI Nishchit Aayush Plan with Level Income + Lumpsum Benefit. He chooses premium payment term 10 yrs , policy term 40 years, benefit option -Long Term Income, Sum Assured 7 times of Annualized Premium and Deferment Period 0 years. Annualized Premium is ₹1,00,000 (Exclusive of GST.). Annual Income of ₹ 32,750 (32,750*40=  13,10,000) + Maturity Benefit (₹20,00,000)= ₹ 33,10,000 ADV/3/24-25/3076.

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People’s needs differ depending on various factors. For instance, when you are a family of just two, a one BHK house would suit your needs. When you have children, you will need a bigger house for a comfortable living.

The same applies to your term insurance coverage. The needs differ for each person. Figuring out the right cover amount to accommodate your family’s financial goals becomes crucial, so they aren’t left hanging if you aren’t around anymore. The article below aims at making the calculation easier for you. Let us head right into it!

How much Term Insurance Cover Amount should you Buy?

A term insurance policy protects your dependent family members from financial jeopardy by paying them the sum assured, i.e., a fixed amount of money, if you pass away during the policy term. This amount will help them meet their financial goals, take care of financial liabilities, and continue living a comfortable lifestyle.

The level of financial instability they might face in the future depends on what you leave behind for them versus what they actually need. This financial gap can play havoc in their lives, which is why a term insurance policy becomes a significant purchase.

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Frequently asked questions

What is the Human Life Value (HLV) method?

It's an approach to estimating the term cover you need, based on the present value of your income, liabilities, and future financial obligations, minus your existing liquid assets.

Is 10-15 times my annual income enough term cover?

It's a commonly used starting point, but the financial-gap method above gives a more precise answer, since it is based on your actual expenses, goals, and liabilities rather than a flat income multiple.

Do I need to update my cover amount over time?

Generally yes. As your income, debts, and family situation change, your ideal cover amount changes too. Reviewing it every few years, or after a major life event, keeps it aligned with your actual needs.

What if I have multiple Loans and dependents?

Add up all outstanding liabilities and the funds needed for each dependant's future needs separately, then include the total in your Major Liabilities and Major Expenses Funds before applying the formula above.

How can ABSLI help you calculate your cover?

You can use the free ABSLI Human Life Value Calculator to get a quick estimate of the term cover appropriate for your family, based on this same methodology.

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Buy ₹1 Crore Term Insurance at Just ₹575/month^*

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^*LI Age 21, Male, Salaried, Non Smoker, Option 1: Level Cover, PPT: Regular Pay, SA:  ₹ 1 Cr., PT: 10 years, Premium paying term: 10 years, Death Benefit Payout as Lumpsum. Annual Premium: ₹ 6900/- ( which is ₹ 575/month), 1 Cr SA is paid and the policy terminates. 
ABSLI Super Term Plan - This Policy is underwritten by Aditya Birla Sun Life Insurance Company Limited (ABSLI). This is a non-linked non-participating individual pure risk premium life insurance plan. UIN: 109N153V02