Investment & Retirement

    Life Insurance Calculator

    Calculate the ideal life-insurance cover using the Human Life Value method — factoring income, expenses, liabilities and existing cover.

    Inputs
    yrs
    yrs
    %
    %
    Result
    Recommended Life Cover
    ₹4,81,06,980
    • Human Life Value (PV of future income)₹4,51,06,980
    • Liabilities₹30,00,000
    • Existing Cover₹0
    • Gap to Fill₹4,81,06,980

    Buy pure term insurance of at least ₹4,81,06,980. You currently have ₹0 — bridge the ₹4,81,06,980 gap.

    Visual Breakdown
    Step-by-step calculation
    1. Working years remaining = 60 − 32 = 28
    2. HLV = Σ [Income × (1+g)^(t−1) / (1+d)^t] for t = 1..28
    3. HLV = ₹4,51,06,980
    4. Required cover = HLV + Liabilities = ₹4,81,06,980
    5. Gap = Required − Existing = ₹4,81,06,980
    How this is calculated
    Cover = Σ (Income × (1+g)^(t-1) / (1+d)^t) + Liabilities − Existing Cover
    Written by Taxpex CA Team
    Chartered Accountants (ICAI) · Reviewed by Taxpex Editorial Board
    Last updated 10 Nov 2025
    When to use this

    Is this the right calculator for you?

    • First-time buyers deciding term-insurance sum assured.
    • Re-evaluating cover after marriage / childbirth / home-loan sanction.
    • Comparing insurers' premium quotes for the same sum assured and tenure.
    Overview

    Understanding the Life Insurance

    This calculator sizes the term life insurance cover an earning member of a household needs — using the Human Life Value (HLV) method and the Income Replacement method. HLV = present value of your future earnings till retirement (discounted at 6–7%); Income Replacement = annual income × (10–20) depending on age and dependents. Buy pure-term insurance — never mix insurance with investment (traditional / ULIP / endowment plans deliver 4–6% IRR).

    Under Section 80C, premiums up to ₹1.5 lakh are deductible (old regime); Section 10(10D) makes maturity/claim proceeds tax-free provided the sum assured is at least 10× annual premium (7× for policies before 1 April 2012). This calculator flags whether your current cover is adequate given liabilities (home loan, personal loan) and future goals (child's education, retirement corpus for spouse).

    Worked examples

    Real-world scenarios, step-by-step

    Age 32, income ₹15 L, home loan ₹40 L, 1 child

    Sizing term cover for a young family.

    • Income replacement: 15 × 15 = ₹2.25 Cr
    • + Outstanding liabilities: ₹40 L
    • + Child education fund: ₹50 L
    • − Existing investments: ₹35 L
    • Recommended cover ≈ ₹2.8 Cr
    Recommended term cover ≈ ₹2.8 Cr.
    Pro tips

    Common mistakes to avoid

    Buying ULIP / endowment thinking it's protection — 4–6% IRR, inadequate cover.

    Under-insuring — ₹50 L cover with ₹15 L income is meaningless for the family.

    Skipping declarations (smoking, medical history) — leads to claim rejection.

    Need a CA to review your numbers? Book a free consult — we'll double-check within 24 hours.

    CA insights

    Expert tips from senior CAs

    • Buy pure term insurance till age 60–65 with sum assured 15–20× annual income.

    • Split cover across 2 insurers (₹1 Cr + ₹1 Cr) for claim-settlement diversification.

    • Buy young — 30-year-old pays half the premium of a 40-year-old for the same cover.

    Frequently asked questions

    Term or endowment insurance?+

    For pure risk cover, always term insurance. Endowment/ULIPs mix insurance with investment and typically deliver poor returns on both.

    Is there a rule-of-thumb?+

    10–15× annual income is a rough guide, but the Human Life Value method (used here) is far more accurate.

    Keep exploring

    People also ask

    Term or endowment insurance?+

    For pure risk cover, always term insurance. Endowment/ULIPs mix insurance with investment and typically deliver poor returns on both.

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    Does this include processing fees or GST?+

    No. Processing fees, insurance, GST on fees and stamp duty are excluded and vary per lender. Add them separately to arrive at the true cost of the loan.

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    Does this include processing fees or GST?+

    No. Processing fees, insurance, GST on fees and stamp duty are excluded and vary per lender. Add them separately to arrive at the true cost of the loan.

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    Does this include processing fees or GST?+

    No. Processing fees, insurance, GST on fees and stamp duty are excluded and vary per lender. Add them separately to arrive at the true cost of the loan.

    via Home Loan Calculator
    Does this include processing fees or GST?+

    No. Processing fees, insurance, GST on fees and stamp duty are excluded and vary per lender. Add them separately to arrive at the true cost of the loan.

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    Cite this page

    This dataset is free to reference in articles, research and reports. Attribution to Taxpex Consultancy is all we ask. Data last verified 31 July 2026.

    Citation (APA)
    Taxpex Consultancy. (2026). Life Insurance Calculator — Taxpex. Retrieved from https://taxpex.com/tools/investment/life-insurance-calculator
    HTML link
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