For most people earning ₹15 lakh or more with a home loan, or ₹25 lakh or more with young children, ₹1 crore of term insurance is not enough: invested at an assumed 8% a year, it pays a ₹10 lakh family budget for about 10 years, and fewer once a loan is cleared from it. It can be enough where nobody depends on your income for long, or where your investments already cover most of the need.
How many years does ₹1 crore of term cover last?
A term plan pays its sum assured once. Assume the family invests it at 8% a year and takes out each year's spending at the start of the year, with spending rising 6% a year. Both rates are assumptions made in 2026, as in the insurance planning guide, not promises. Spending means the household's living costs without the earner, before any loan. The spending figures are assumed for each salary; if your family spends more or less, read the row nearest your own spending.
| Salary (CTC) | In hand a month, FY 2026-27 | Family spending a year | Full years ₹1 crore pays | 10 to 15 times income |
|---|---|---|---|---|
| ₹15 lakh | about ₹1,00,700 | ₹7 lakh | 16 | ₹1.5 crore to ₹2.25 crore |
| ₹25 lakh | about ₹1,56,700 | ₹10 lakh | 10 | ₹2.5 crore to ₹3.75 crore |
| ₹40 lakh | about ₹2,29,100 | ₹14 lakh | 7 | ₹4 crore to ₹6 crore |
In-hand figures are from the CTC to in-hand table. At ₹15 lakh, 16 years carries a two-year-old to 18; at ₹40 lakh, the money runs out before that child is ten. The last column is the common rule of thumb, an industry convention rather than a regulation, and ₹1 crore falls below it at all three salaries.
Is ₹1 crore enough with a ₹45 lakh home loan?
Nupur, 34, earns ₹25 lakh a year. She bought ₹1 crore of term cover at 27, when she earned ₹10 lakh, so it was 10 times her income then. She now has a ₹45,00,000 home loan and a two-year-old, and her husband stays at home with their child. Without her, the family's living costs, not counting the EMI, would be about ₹10,00,000 a year.
If she died today, clearing the loan leaves ₹1,00,00,000 minus ₹45,00,000, or ₹55,00,000, which runs like this at the same 8% and 6%, rounded to the nearest ₹100:
| Year | Money at the start | Spending that year | Left, after 8% growth |
|---|---|---|---|
| 1 | ₹55,00,000 | ₹10,00,000 | ₹48,60,000 |
| 2 | ₹48,60,000 | ₹10,60,000 | ₹41,04,000 |
| 3 | ₹41,04,000 | ₹11,23,600 | ₹32,18,800 |
| 4 | ₹32,18,800 | ₹11,91,000 | ₹21,90,000 |
| 5 | ₹21,90,000 | ₹12,62,500 | ₹10,01,800 |
| 6 | ₹10,01,800 | ₹13,38,200 | runs out |
That is five full years and about three-quarters of a sixth, when her child would be seven. Without the loan, ₹1 crore would pay 10 full years, the ₹25 lakh row above.
How much cover lasts until a two-year-old is 21?
For Nupur's family, that is 19 years. ₹10 lakh a year, rising 6% and drawn at the start of each year, for 19 years at 8% is worth about ₹1.61 crore now. Add the ₹45 lakh loan and the cover comes to about ₹2.06 crore, about ₹1.06 crore more than she holds.
To her planned working age of 58, 24 years away, the spending is worth about ₹1.95 crore, or about ₹2.4 crore with the loan. Take off her ₹30 lakh of investments in EPF, PPF and mutual funds and add an assumed ₹20 lakh for her child's education, and it comes to about ₹2.3 crore, a little under the 10 times figure of ₹2.5 crore for her income. The insurance planning guide builds that figure from scratch, line by line, with a second worked case.
When is ₹1 crore term insurance enough?
It can be, in three cases. One is when no one depends on your income, such as a single person with no dependants or a childless couple with similar incomes. Another is when investments already cover most of the need: in the 24-year sum above, every ₹10 lakh she owns takes ₹10 lakh off the cover, so with about ₹1.6 crore invested instead of ₹30 lakh, ₹1 crore would be enough. The last is when spending is low enough for the years to cover the dependence: at ₹15 lakh, with ₹7 lakh of family spending and no loan, ₹1 crore pays 16 years, enough to carry a child of five to 21.
How do you add cover to an old ₹1 crore plan?
Many people keep the old plan, priced at a younger age, and buy a second term plan for the gap, disclosing the existing cover on the proposal within the insurer's income-based cap on total cover.
The new plan is priced at your age and health now. As a rough 2026 guide, a 30-year-old non-smoker pays about ₹8,000 to ₹15,000 a year for ₹1 crore of cover to age 60, depending on the insurer and health, so at 34 it costs more per crore. Individual term premiums have carried no GST since 22 September 2025, while group policies such as an employer's cover still carry 18%. How long the new plan should run is covered in term insurance till what age, and since a base term plan does not pay out on disability, the disability gap needs cover of its own.
Dhi looks at the whole picture, including your protection, net worth and goals, and answers questions like this one from your own numbers. Dhi earns no commissions and never mis-sells a policy.
Frequently asked questions
This is general information for salaried individuals in India, not personalised financial advice.
