How much life cover does my family actually need?
Work it from what your family would have to find, not from a multiple of your income. Add the loans that would need clearing to the living costs they would need replacing for however many years you choose. Then subtract what they would already have — savings they can reach, plus any cover already in place.
Try it on your numbers in the Life cover calculatorWhy "ten times your salary" is a shortcut, not an answer
Rules of thumb built on income multiples are popular because they are easy to say, not because they describe anyone in particular. Two people on identical salaries can need wildly different cover: one has a large home loan and young children, the other has no debt and a working partner. Income is an input to the answer, not the answer.
The arithmetic that actually describes a household is a subtraction. On one side, what the money would have to do: clear the outstanding loans so the family is not servicing debt on a reduced income, and replace day-to-day living costs for a period. On the other, what is already there.
Choosing the number of years
This is the one figure only you can set, and it moves the answer more than anything else. People commonly pick a span tied to something real: until the youngest child finishes education, until a partner reaches their own pension, or until an outstanding loan would have run its course.
Whatever span you choose, use living costs rather than total outgoings when you multiply. If you are already clearing the loans separately in the same sum, including the EMIs in the monthly figure counts those loans twice — once as a balance to clear, and again as a payment continuing for years after it has been cleared.
What counts as money they could reach
Be conservative about the other side of the subtraction. Money in a savings account, deposits, shares and funds can be reached. The home your family lives in cannot be spent without moving out, and what a provident fund pays out and when depends on scheme rules. Leaving those out gives you a figure that errs towards more cover rather than less.
Life cover
Questions people ask
Does the home loan need to be covered separately?
Include the outstanding balance in what the money would have to do. Some loans carry their own cover attached to them, in which case check what it actually pays and to whom before counting it twice.
Should I count my provident fund as cover?
It is real money, but what it pays out and how quickly depends on scheme rules and on the claim being processed. Leaving it out of the calculation gives a more cautious figure, and anything it does pay is then a cushion.
How often should this be recalculated?
Any time the underlying facts move — a new loan, a child, a change in income, or a loan cleared. The figure is a subtraction of things that change, so it goes stale quietly rather than obviously.
Does a working partner change the number?
Considerably. If the household would still have an income, the living costs that need replacing are only the shortfall rather than the whole, which usually reduces the figure a great deal.
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Try it nowLast updated 5 October 2026. Figures reflect FY 2026-27 and are educational estimates, not advice. Muktify is not SEBI-registered and never recommends or ranks any instrument. How we write and check guides.