A term insurance plan offers more than a sense of security, it creates a financial cushion that protects your family in case of your absence. With the recent goods and services tax (GST) rate overhaul making term insurance products 18% cheaper, many people focus on simply "having" a policy. Far fewer stop to assess whether their life cover is actually adequate for their family’s needs.
A term insurance plan offers more than a sense of security, it creates a financial cushion that protects your family in case of your absence. With the recent goods and services tax (GST) rate overhaul making term insurance products 18% cheaper, many people focus on simply "having" a policy. Far fewer stop to assess whether their life cover is actually adequate for their family's needs.
Consider the case of Ravi, 35, and Priya, 32, a young married couple in Bengaluru, both software engineers building a life together with their child. Like many families, they had taken on financial commitments to pursue their aspirations: a ₹35 lakh home loan and a ₹10 lakh car loan. Life seemed on track until tragedy struck and Ravi unexpectedly passed away.
Ravi had a term insurance cover of ₹30 lakh, far below the family's total financial obligations. The burden of EMIs, childcare and education now fell entirely on Priya. Had Ravi opted for a ₹1 crore cover, Priya could have cleared both outstanding loans and still been left with a sizeable corpus to support herself, raise their child and continue their financial savings plan. In effect, Ravi's insurance would have acted as an income-replacement tool for the family.
What does 'adequate' life cover really mean?
A popular rule of thumb suggests a life cover worth 10 times your annual income. But real-life needs often stretch far beyond that. With inflation steadily raising the cost of living, a policy purchased seven years ago may no longer be sufficient today.
Your ideal life cover should take into account your family's monthly expenses and the number of years they will need support. It should also include outstanding financial obligations, future expenses such as children's education, and ongoing healthcare needs. Inflation must be built into this calculation, as costs rise, the real value of your cover falls if it's not planned carefully.
Ultimately, adequate life insurance isn't about chasing a number. It's about giving your family the financial space to breathe, cope and move forward if something were to happen to you.
Why starting early matters
Timing plays a critical role in life insurance. The earlier you start, the better: premiums are lower when you're younger, and you have the flexibility to increase or customise your coverage as your life evolves. Whether that means marriage, becoming a parent or taking on new financial responsibilities. Early planning locks in long-term protection at an affordable cost.
A term insurance plan is a natural choice for most people because it offers a high sum assured at a reasonable premium. You can strengthen this with add-ons such as Waiver of Premium, Accidental Death Cover. or Critical Illness Benefit.
It's equally important to review your policy at key life stages—marriage, parenthood or taking on major commitments like a home loan—and adjust your coverage. A term plan that covers long-duration obligations such as a home loan ensures that an unforeseen event doesn't derail your family's financial engine.
Not just insurance, but a responsibility
Time and again, life insurance has proven to be more than a financial product. It is a promise of stability, one that ensures your loved ones can continue their journey, pursue their dreams and face the future with dignity and confidence, even if you're no longer around to guide them.
Adequate financial protection is no longer a luxury. It is a necessity.
Vikas Gupta, chief product officer, ICICI Prudential Life Insurance Co. Ltd.