How much money will your family need if your income stops? The life insurance rule tells you that you should have a life cover which is at least 10 times your current income. It should factor in all your liabilities or loans also.

This rule is an indicator of how much income your family will need to survive and manage their day-to-day expenses if you are not around.

In short if your annual income is Rs. 5 Lakhs, you need Rs. 5 crore of life cover, so that your family does not face any financial difficulty and can continue with their current life style, even in your absence.

An important point to note is that your income will change with time and you should keep reviewing your life cover every few years. The insurance rule is a mantra for the financial security of your family, in case of your untimely death.