Kotak Life
Close

Buy a Life Insurance Plan in a few clicks

Close

Now you can buy life insurance plan online.

Kotak e-Term Plan

Kotak e-Term Plan provides a high level of protection to your loved ones in your absence. Know more

Kotak Guaranteed Savings Plan

Kotak Guaranteed Savings Plan is a savings and protection plan that helps you achieve long-term financial goals and provides an insurance cover against any eventuality. Know more

Kotak E-Invest

Kotak e-Invest plan is a complete Unit-Linked Insurance Plan that can be customized as per your goals and needs. Know more

Kotak Health Shield

Kotak Health Shield Plan helps secure your finances in sudden medical expenses such as Cardiac, Liver, Neuro, and Cancer (all early and significant illness stages/conditions of cancer), along with offering protection for personal accidents - in case of accidental death or disability. Know more

Kotak Lifetime Income Plan

Kotak Lifetime Income Plan gives you the security of your income continuing throughout your life and in your absence throughout your spouse's lifetime! Know more

How Much Life Insurance Cover Do I Need?

How Much Life Insurance Cover Do I Need?
  • 10th Nov 2021 |
  • 430

A question that continues to be prevalent for all of us even today is - what is an insurance policy? In layman’s terms, an insurance policy is a legally binding contract between the insurance company and the primary policyholder wherein the insured has to pay regular premiums to protect their family in their absence. The insurer promises to pay a claim to the beneficiaries if the policyholder dies during the chosen term or provides a maturity benefit to the insured if they outlive the term.

Everyone aspires to have the best insurance policy that caters to their and their family’s requirements holistically. However, merely purchasing a life insurance cover is not where the quest ends. It’s imperative that you figure out how much insurance amount you need based on your objectives and requirements while also making sure it fits well within your budget.

Acquiring a life insurance policy early in life is a prudent decision to protect your loved ones and secure a bright future for them. Since these policies offer a plethora of benefits, there are no doubts about why life insurance is important.

Factors to Consider Before Determining Your Cover in India

The sum assured, or the insurance amount offered, is generally the motivating element for purchasing an insurance policy. However, before making the final choice to purchase insurance, it is absolutely critical to examine the following set of factors to choose the best insurance policy for you.

  • Age
  • Although the life insurance age limit is an important factor to consider when determining the amount of coverage you need, it is not an excuse to put off purchasing a policy. Your age and health will influence not only how much insurance you should get but also how long you should keep it. The life insurance age limit starts at the age of 18 years, so you can purchase a policy right after you begin earning.

  • Family & Lifestyle
  • If you want to protect your family’s future and lifestyle with meticulous planning, it is recommended that you choose the best insurance policy that fits your needs and rewards you with a higher cover.

  • Outstanding Debts
  • Debts such as student loans, vehicle loans, credit cards, and personal loans can all be paid off using insurance amount by your loved ones after you are gone. Therefore, if you owe any of such debts, you should buy an insurance policy that fully covers you.

  • Budget Bracket
  • If you can’t afford to pay the policy premiums, your life insurance policy will lapse. A more comprehensive life insurance cover would also demand a higher premium amount, therefore opt for a plan that fits your budget.

How to decide term insurance amount?

  • Income Substitution
  • It is expected that a life insurance policy will cover the breadwinner’s lost wages in this approach.

    Formula: Insurance coverage = current annual income x number of years till retirement

  • Value of Human Life
  • This technique takes into account a person’s financial or human life value (HLV) to the family. The worth of future income, spending, obligations, and investments is the main focus of the idea.

  • The Rule of The Underwriter
  • You can use the usual thumb rule of having a sum guaranteed that is ten times your yearly salary to figure out how much coverage you need.

  • Substitution of Expenses
  • Individuals must assess their day-to-day family costs, debts, children’s schooling, as well as the financial dependence of parents for the rest of their life using this approach. The entire amount required by your family is equivalent to the cover you need.

Having read the article, you are now aware of why life insurance is important. As a general rule, each individual differs from the next, as do their demands and insurance plans are no exception. Therefore, it is essential to consider all factors relevant to your needs and requirements before investing in a policy for the greater good.

Kotak e-Term Plan

Features

  • Nominal Cost
  • Multiple Plan Options
  • Flexible Payout Options
  • Critical Illness Rider
  • Tax Savings
  • Long term Coverage

Ref. No. KLI/22-23/E-BB/492

T&C

Browse our library of resources

- A Consumer Education Initiative series by Kotak Life

Similar Articles

Insurance Policy for Housewife In India

Why Buy Term Insurance Plan With a High Cover?

Importance of Term Insurance at Every Stage of Your Life

Why Surrendering Your Term Plan Policy In The Final Phase Maybe A Bad Idea?

Steps on How to Buy Term Insurance Online

Tax Benefits of Term Insurance in India

Why Buying a Term Plan Is Smarter Than Traditional Life Insurance Products

Buying A Term Insurance? Don't Ignore the Claims Settlement Ratio

Everything About Claim Settlement Ratio for Term Insurance

Different Types of Premium in Term Insurance

Ideal Features of a Suitable Term Plan - Act Now for a Stress-free Future

Buying A Term Insurance Plan? Take These Factors into Account

How Much Cover Should I Take In A Term Plan?

Is There Any Tax Benefit on Term Insurance?

All you need to Know about Term Insurance Plans for Housewives

Why should single women purchase term life insurance?

Eligibility Criteria for Buying Term Insurance in India

What is a Joint Term Insurance Plan? Key Benefits of Joint Term Plan

Does Your Term Insurance Plan Cover Death Due to COVID-19?

6 Reasons That Make Term Insurance a Must Buy

Make Your Online Term Plan Your Familys Monthly Payout

Increasing Term Insurance and Riders

Individual Life Insurance vs. Group Term Life Insurance

All About Term Insurance Inbuilt Coverage

Is Group Term Life Insurance Provided By Employer Sufficient?

While Buying Term Insurance Compare Features, Not Just Premiums

Key IRDAI Regulations That Changed Face Of Term Insurance Industry In 2020

What Happens to Term Insurance Plan With No Beneficiary - Kotak Life

5 Term Insurance Benefits for Single Women

How to Ensure That Your Term Insurance Claims Are Never Rejected?

Why Term Plan Should Be The First Step To Securing Your Future?

Gift Your Father A Term Insurance Plan This Father's Day

How to Identify Term Insurance According to Your Needs?

Should Youngsters, Working Couples Buy Term Insurance Plans?

Is Life Insurance Investment Worthy Enough

How to Surrender Term Life Insurance When you have No Liabilities

Difference between Term Insurance and Life Insurance

Term Plans are Definitely Cheaper than You Think!

Term Insurance Basics You Should Know

9 Most Frequently Asked Questions on Term Insurance

Protection for your family

What is a short term insurance policy?

Term Insurance Age Limit – Term Plan for All Age Groups

Know How to Invest at Every Age for Larger Returns

Reasons You Need Term Insurance Plan as a Self-Employed Person

Can I Make Changes to My Term Insurance Policy Post Purchase?

Why Buy Term Insurance Even at Rising Rates?

When is the Right Time to Buy Term Life Insurance Policy for Yourself?

Why does every working woman need life insurance?

Why Should New Parents Buy Term Life Insurance?

Tips to Choose the Right Term Period for Term Insurance Plan

Insuring Against Disability With Disability Insurance Rider

Why Term Insurance Is Important in times of COVID-19?

Is Term Life Insurance Plan an Investment or Expense?

What Is the Correct Age to Buy Term Insurance?

Is term Insurance Needed for People With No Dependents?

How Does Term Life Insurance Work? Learn the Benefits

Online vs Offline Term Insurance: Which Is The Better Option To Buy

What Is a Renewable Term Insurance Policy?

Why Term Insurance Is Better Than ULIP?

Insuring Against Accidents with an Accidental Death Insurance Rider

Are The Add-ons and Optional Features of Term Insurance Plans Actually Beneficial?

Best Investment Plans for Children - Secure Your Child's Future

What is the Right Term Period For Term Insurance Policy? Here's How You Should Choose!

Can Term Insurance Plans Be Purchased As A Gift?

Term Insurance Calculator - Everythng You Need To Know

What is Critical Illness Policy

5 Things To Consider While Buying Term Insurance Plan

Does Term Insurance Cover Accidental Death?

Term Insurance: What Happens When You Don’t Pay Your Premiums?

8 Benefits of Term Insurance You Should Know

What is Term Insurance - A Complete Guide

Can I Buy Term Insurance for a COVID-19 Patient?

Term Life Insurance Plan for Smokers vs Non-Smokers

Understanding Term Insurance Riders

Insuring yourself against Ill Health with a Critical Illness Rider

Can I Extend the Tenure of My Term Insurance Plan?

How To Choose the Right Term Insurance Plan?

How Does A Term Life Insurance Work in India?

Should You Buy a Term Plan After 40?

5 Benefits of Early Retirement Planning

What Should You opt for - Limited or Premium Pay?

Busting Myths and Facts About Term Insurance Policies

Term Insurance with Critical Illness

Why is it important to buy term insurance plan?

Why Should You Not Take A Term Plan Without Medical Test in India?

How Not To Get Your Term Insurance Claim Rejected

What Happens if you Hide Facts in your Term Insurance?

Top 3 Reasons Why You Should Buy A Term Plan Now

Is It Good To Buy A Term Insurance Plan In 2022?

What are incremental term insurance plans?

How to Compare Term Insurance Online

9 Ways to Help Family Members in Financial Trouble

Term Insurance Plans and Policies for Smokers

Is a Term Insurance Policy Portable?

What Is a Passive Income? Why Should You Use It to Buy a Term Plan?

Term Insurance: Smokers vs Non-Smokers

Comparing Term Plans – What Should You Look Out For

What Are the Best Term Insurance Plans for Planning Retirement?

Do You Need Term Insurance Cover After Retirement?

Do Beneficiaries Pay Taxes on Term Insurance?

Why Premium Amount for Term Insurance is So Low?

What Should Be The Duration Of Your Term Plan in India?

Make Your Online Term Plan Your Family's Monthly Pay Cheque

8 Factors to consider before choosing a Critical Illness Insurance

Cost of Term Insurance Likely to Increase Soon

Insuring Protection Against Death With Death Insurance Rider

Why Married People Should Buy Term Insurance Under MWP Act?

4 Things To Expect From Your Term Insurance Plan in India

6 Types of Death not covered in Term Insurance Plan

Advantages & Disadvantages of Term Insurance in India

Ensure Protection Against Death, Disease & Disability With Life Insurance

What Are Insurance Riders and How to Choose Them in a Term Plan?

Term Insurance: Most Common Term Insurance Myths Explained | Kotak Life

Can Non-Resident Indians (NRIs) Buy Term Insurance In India?

Why 1 Cr Term Plan Is Necessary For Family?

Term Insurance With Riders In India

Can Senior Citizens Avail Term Insurance?

Why Should You Add a Rider to a Term Insurance Plan?

Which Death Type Does Your Term Plan Not Cover?

5 Reasons to Buy Term Insurance When You are in Your 30s

What are the Documents Required for Term Insurance Plan?

How To Change The Nominee in Term Insurance?

Key Differences Between Term Insurance, ULIPs, And Health Insurance

Term Plan with Spouse Cover

How To Choose the Right Sum Assured Under a Term Plan?

Why Should You Buy Term Insurance in 2022?

8 Things To Do After Buying Term Insurance

टर्म इंश्योरेंस क्या है? टर्म इंश्योरेंस का मतलब

What All Documents Required For Term Insurance In India?

Term Vs. Whole Life Insurance: Which One You Should Buy in India?

What is Form 16, Form 16 part A, Form 16 part B, Information Required and FAQs

Should You Have Multiple Term Life Insurance Policies?

4 Methods to Calculate How Much Term Insurance You Need

How Much Term Insurance Do I Need

Endowment Plans vs Term Plans: Understanding the difference

Calculating Term Insurance Premium

Planning For Son or Daughter's Wedding

Advantages of Buying Term Insurance in Your 50s

4 Reasons Why You Need Critical Illness Cover

Do I Need to Give a Medical Test for Term Insurance in India?

Is ₹1 Crore Term Insurance Good Enough Cover?

Term Insurance – Why You Must Include In Your Financial Planning?

How To Calculate The Amount Of Term Life Insurance You Need?

What Types of Deaths Are Covered in a Term Insurance Plan?

Is it a Good Time to Buy Term Insurance During the COVID-19 Pandemic?

How to Buy 1 Crore Life Insurance Policy Without Medical Test

How Much Term Life Insurance Cover Do I Need in India?

10-Year Term Life Insurance Policy - Explained in Detail

Can I Get Term Insurance on Behalf of My Spouse?

Choosing Riders for Insurance Plans

Planning For Children's Future

Can A Housewife Buy a Term Insurance Plan - All You Need to Know

Can You Increase Your Term Insurance Cover?

What is Insurance Premium - A Detailed Guide

Which Term Insurance to Choose: Lump Sum or Staggered Pay-out Plan?

Different Types of Protection Plans