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Summary: The ten-times-income rule for life insurance is easy to remember and right for only a few years of your life. The cover you actually need peaks when your debts are largest and your savings smallest. And by your mid-fifties, you've largely become your own insurer.
Buy life insurance by a multiple of income, 10 times or 15, and you are using a number that is easy to remember, easy to sell, and right for only a few years of your life.
The cover you need is not fixed. It climbs through your thirties, peaks when your debts are largest and your savings smallest, then falls as the loan shrinks and the corpus grows. By your late fifties, with the loan cleared and the savings grown, you have largely become your own insurer. Buy the most cover when you have the most to lose, and let it end when the need does.
The cover you need rises and falls
Follow one family: a 35-year-old sole earner on Rs 18 lakh a year, two young children, a Rs 50 lakh home loan.
The same family needs about Rs 2.3 crore at 35 and almost nothing by 55. The flat 10-times rule demands Rs 1.8 crore the whole way.
| At age | Home loan left | Corpus built | Cover you need | Flat 10x rule |
|---|---|---|---|---|
| 35 | Rs 50 lakh | Rs 12 lakh | About Rs 2.3 crore | Rs 1.8 crore |
| 45 | Rs 36 lakh | About Rs 65 lakh | About Rs 85 lakh | Rs 1.8 crore |
| 55 | Nil | About Rs 2 crore | Almost nil | Rs 1.8 crore |
| Illustrative. The cover at each age is the income still to be replaced, plus the outstanding loan and education, minus the corpus already built. Assumes a 20-year loan at 9 per cent and saving of about Rs 2.5 lakh a year, invested at 9 per cent. Today's rupees. | ||||
The multiple lands on the right number just once, on the way down from the peak, in the late thirties. At the peak it falls short, here by about Rs 50 lakh. It feels sensible at purchase only because it is in the right ballpark. Ten years on, it insures about twice what your family needs. By your mid-fifties, it covers a loss that can no longer happen. It is a snapshot mistaken for a rule. Size your cover to where you sit on the curve, and recheck it at the moments that move it: a new loan, another child, the loan cleared.
How much: Size it to the gap
Work it out once. Add what your family would need if your income stopped, the debts they must clear, and the large costs ahead such as education. Subtract your savings and any employer cover. What remains is the cover to buy. For our 35-year-old, about Rs 2.3 crore. A round Rs 1 crore would leave them less than half covered.
Count employer cover lightly, if at all: it vanishes the day you leave the job.
The price reassures, and has just improved. Since September 22, 2025, individual life premiums carry no GST. For a healthy 35-year-old non-smoker, Rs 1 crore of pure term to age 60 runs about Rs 11,000 to Rs 13,000 a year, near Rs 1,000 a month, across the large insurers. Cover is cheaper by the crore: doubling to Rs 2 crore raises the premium by two-thirds to four-fifths, not double. The second crore is the cheapest you will buy, so do not underbuy to save a few hundred rupees a month.
| Cover and term | Annual premium |
|---|---|
| Rs 1 crore to 60, bought at 30 | About Rs 9,000 to Rs 11,000 |
| Rs 1 crore to 60, bought at 35 | About Rs 11,000 to Rs 13,000 |
| Rs 1 crore to 60, bought at 40 | About Rs 15,000 to Rs 19,000 |
| Rs 2 crore to 60, bought at 35 | About Rs 18,000 to Rs 24,000 |
| Rs 1 crore to 75, bought at 35 | About Rs 17,000 to Rs 20,000 |
| Illustrative online pure-term quotes, healthy male non-smoker, three large private insurers, June 2026. GST-exempt since 22 September 2025. Your quote varies with health, city, and insurer. | |
How long: Until the need ends
Cover yourself as long as someone depends on your income, usually to 58 or 60. By then, the loan is gone, the children earn, and the corpus replaces the salary. Insurers will offer cover to 75 or 85; for most buyers, resist it. Extending the same person's cover from 60 to 75 raises the premium by about half, to insure years when you are already your own insurer.
Better still, buy in layers. Hold one Rs 1 crore policy to age 60 and a second set to end around 50, when the loan is gone. You carry Rs 2 crore through the dangerous decade and Rs 1 crore after, and stop paying for the second crore the moment its need passes. A policy ending at 50 costs less than the same cover to 60, so the lifetime premium steps down with the cover.
One exception: if someone will depend on you for life, a child with a disability, for instance, your cover should last as long as you can fund it.
Buy early, keep it pure
Age only raises the price. The Rs 1 crore that costs a 30-year-old about Rs 9,000 to Rs 11,000 a year costs a 40-year-old about Rs 15,000 to Rs 19,000, for fewer years of cover. Waiting a decade adds most of the premium again.
And keep insurance and investment apart. Buy pure term, nothing that returns your money. A death benefit is tax-free, and for a death payout that holds regardless of the premium paid; it is an exemption in law, not a deduction, so it survives the new tax regime. You need no tax justification to buy term. The protection is the point.
Size the cover to the curve, end the term with the need, and your insurance does its one job. The other job, building the corpus that one day retires your need for cover, belongs to your investments.
For help with that half of the equation, keep reading Value Research Online.
This article was originally published on June 24, 2026.
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