How Much Insurance Do You Really Need?

Insurance is not about buying products. It’s about making sure your family’s life doesn’t collapse financially if something goes wrong.

Quick takeaway
The right insurance amount protects income, clears liabilities, and absorbs medical shocks — without overpaying or underinsuring.

Insurance Is About Protection, Not Premiums

Most people choose insurance based on what premium feels affordable. That approach is backwards.

⚠️ Choosing insurance based on premium usually leads to inadequate cover — and regret later.

Insurance planning should start with a single question: “What financial damage needs to be absorbed?”

Life insurance exists to protect your dependents if your income stops permanently.

Factor	Why it matters
Annual income	Base for income replacement
Dependents	Determines duration of support
Loans & EMIs	Must be cleared immediately

✅ A common rule of thumb is 10–15× annual income, adjusted for liabilities and goals.

→ Use the Term Insurance Calculator to estimate realistic cover and premium.

Health insurance protects your savings — not your income.

🎯 Under-insuring health is one of the most expensive mistakes Indian families make.

An emergency fund protects you from temporary income loss and sudden expenses.

Income stability	Suggested fund size
Stable salaried job	6 months of expenses
Private sector / variable income	9 months of expenses
Business / freelance	12 months of expenses

⚠️ Emergency funds should be liquid and safe — not invested for returns.

True financial protection comes from combining all three layers:

Layer	Protects against
Life insurance	Permanent income loss
Health insurance	Medical emergencies
Emergency fund	Temporary income disruption

✅ No single policy can replace this combination. Protection works as a system.

Insurance is peace of mind.
You hope you never need it — but you’re grateful when it’s there.