1. Life Insurance Guide /
  2. Term /
  3. Term Insurance Plan Tenure and Cover

Term Insurance: How Much Should You Be Insured For And For How Long?

Oct 10, 2018

Term insurance plan is affordable and offers not just tax benefits, but also peace of mind that your loved ones will continue to achieve their life goals even in case of your untimely demise. However, most of us might not have a clear idea of how much we should be insured for and for how long. As a result, we end up being underinsured or paying steeper premiums than we need to if we over-insure ourselves. There is, however, a simple way of figuring out how much insurance you ought to have, and what its term should be.

The Basics

The basic formula to calculate the term insurance cover will depend on the age and annual income of person. You can go up to 25 times of your annual income to ensure you have an adequate cover.

Other Parameters to Consider

The above basic formula is an easy way to work out an estimate. However, one can arrive at a more accurate figure by taking into account the number of dependents you have, the living expenses of your dependents, the lifestyle you would wish them to have, the length of time you estimate that they will need the financial support in your absence, and existing investments you may have. If you have any saleable assets which can help your family in their hour of need, you can deduct these from the amount you have arrived at. Further, you should add the cost of the debts you currently have, such as a home loan or car loan. The resulting figure is a more accurate indicator of what amount you should be insured for.

The Tenure

Another factor worth considering is how long you should be insured for. Consistent investments into a specialized pension plan will provide for a good lifestyle once you retire. However, you need to be adequately insured until that age when you would be earning. This way, your family's goals will continue to be met even in your absence.

To summarize, the amount you should be insured for should be enough to cover your family's needs in your absence and for as long as they would need the financial support. With these parameters in place, you can have that peace of mind that your family will be able to go on to achieving their life goals even if you're not there to provide for them.

Popular Articles

Featured Articles
Why Return of Mortality Charge (RoMC) is a Revolutionary Idea

Why Return of Mortality Charge (RoMC) is a Revolutionary Idea

Over the last few years, keeping in mind the customer's feedback and needs, the regulator and the life insurance industry have helped ULIPs evolve considerably to provide...Read more...

RoMC - The Key To Long-Term Investing

RoMC - The Key To Long-Term Investing

Investing in a disciplined way over an extended period of time has many benefits. First, it helps you tide over the market volatility. Second, when you give time to...Read more...

Know How RoMC Enhances Your ULIP Investments

Know How RoMC Enhances Your ULIP Investments

Unit Linked Insurance Plans (ULIPs) have emerged as a befitting investment vehicle, post the many significant regulatory reforms introduced between 2010 and 2013...Read more...

Your Guide to ULIP Insurance Riders

Your Guide to ULIP Insurance Riders

A Unit-linked Insurance Plan (ULIP) is designed and structured in a way that takes care of both your life insurance and investment needs. Yet, there might be some unforeseen circumstances in life...Read more...

Why You Should Remain Invested For The Full Tenure In ULIPs

Why You Should Remain Invested For The Full Tenure In ULIPs

There's a popular refrain in the financial circles, Don't try to time the market, instead give your investments enough time to grow. This is more so in the case of investments in equities..Read more...

Term Insurance : Insurance That Costs Less Than Your Daily Chai

Term Insurance : Insurance That Costs Less Than Your Daily Chai

Paul Stanley once said "Youth is incredible because you really do feel invincible." Since young professionals feel nothing can go wrong at their age, they tend not to plan for their future...Read more...

Term Insurance Benefits and Things To Consider Before Buying a Term Insurance Plan

Term Insurance Benefits and Things To Consider Before Buying a Term Insurance Plan

Safety is an important consideration for all of us. For instance, when we are driving, we make sure that we have our seatbelts on for our safety.Read more...

Term Life Insurance Policy Riders: Why They Matter

Term Life Insurance Policy Riders: Why They Matter

The Oxford English Dictionary defines a rider as "A condition or proviso added to something already agreed". When added to your life insurance policy, riders can be an effective and powerful addition..Read more...

Why Term Insurance Is important for Working Couples

Why Term Insurance Is important for Working Couples

Power couples are on the rise. We see more families where both partners are choosing to climb the corporate ladder. It's a myth that life insurance.Read more...

8 Questions You Should Ask Yourself Before Buying a Term Insurance Plan

8 Questions You Should Ask Yourself Before Buying a Term Insurance Plan

Term insurance is the purest form of insurance where for a fixed premium, you cover yourself against any unforeseen contingencies...Read more...

How to Choose the Best Critical Illness Cover for Yourself

How to Choose the Best Critical Illness Cover for Yourself

With increasing incidences of critical illnesses, such as heart ailments, insurance policies covering such diseases are a must-have in your insurance portfolio,... Read more...

Know 4 Different Types of Health Insurance Plans

Know 4 Different Types of Health Insurance Plans

Healthcare expenses can be the biggest drag on your finances. With lack of quality public healthcare system,... Read more...

Compare an ordinary Health Insurance Plan and a Critical Illness Cover

Compare an ordinary Health Insurance Plan and a Critical Illness Cover

Many of us are confused about the difference between a traditional health insurance plan and a critical illness cover.. Read more...

Handle NCDs with the help of a Critical Illness Cover

Handle NCDs with the help of a Critical Illness Cover

Cast a cursory glance around and the chances are some of your friends or acquaintances are battling serious illnesses...Read more...

Critical Illness Cover Policy or Rider Benefit: What makes more sense?

Critical Illness Cover Policy or Rider Benefit: What makes more sense?

Sometimes we have to handle a few hurdles in our road to realizing our life goals. Usually, these hurdles arrive when we least expect them... Read more...

A Guide to ULIP charges to invest better in them

A Guide to ULIP charges to invest better in them

Investing for your life goals is the key to turn those goals and aspirations into reality. As a responsible investor, it is important to set aside a portion of your income every month... Read more...

What are different types of ULIP funds?

What are different types of ULIP funds?

Unit Linked Insurance Plans (ULIPs) provide the dual benefit of insurance cover and wealth creation to its investors. Which means policyholders get life cover along with..Read more...

How To Save Income Tax By Investing In Term Life Insurance Plan

How To Save Income Tax By Investing In Term Life Insurance Plan

Every year, around the end of the financial year, we tend to seek out financial instruments which help us in tax planning and savings. Of these, buying a life insurance... Read more...

Why terms plan in life insurance is important for single women

Why terms plan in life insurance is important for single women

A ladies handbag is her "Armageddon Resource Centre", carrying everything ranging from tissues to snacks, from coins to a Swiss army knife, and from makeup to pepper spray. Naturally, because women..Read more...

Term-plan

Term Insurance: How Much Should You Be Insured For And For How Long?

Term insurance plan is affordable and offers not just tax benefits, but also peace of mind that your loved ones will continue to achieve..Read more...

Tips To Invest In Ulips

4 ULIP investment tips one should never forget

Picking the best restaurant or cafe is a much easier task today, thanks to the internet! All that you need to do is, check out the online reviews, ambience,photographs and of course.. Read more...

Recommendations On Ulip vs - Equity Investment

3 reasons why ULIP plans are one of the preferred choice for equity investments

Inflation is the biggest factor you need to watch out for while investing. This is because inflation eats into your savings over a period of time..Read more...

Achieve your long-term goals with ULIPs

For meeting your long term life goals, equity as an asset class is quite suitable. What is required is a disciplined approach over a period of time, and before you know it, your dreams.. Read more...

Tips to overcoming market volatility with ULIP From Bajaj Allianz Life

How to tide over market volatility with ULIPs

The fear of market volatility often keeps retail investors away from equity investment. It is this fear that deprives millions of investors from the benefit of tax-efficient and often.. Read more...

Advantages of Investing Early

Advantages of investing early in ULIP plan

There goes a saying, 'The early bird catches the worm'. In literary sense, it means that a person will have an advantage if they do or start something early. In the world of investments it means that.. Read more...

Move a step closer to your Life Goals with prudent financial planning

Move a step closer to your Life Goals with prudent financial planning in online ULIP policy

The new calendar year has witnessed some volatility, especially for the broader markets (small/mid-cap space). In this scenario the retail investors have become... Read more...

Monthly Investment Planning With ULIPs From Bajaj Allianz Life

Why monthly investments in ULIPs make sense?

The daily ups and downs in the stock markets can be incredibly unnerving for a retail customer and can dissuade them from investing in the markets. On March 1 this year, the..Read more...

5 factors to help you choose the best ULIP plan

5 factors to help you choose the best ULIP plan

Investments are no longer just about saving for the rainy day. We want to invest to get best possible returns on our investments to achieve our life goals and aspirations.... Read more...

Top 5 myths associated with ULIP investments

Top 5 myths associated with ULIP investments

The perception of ULIPs as an expensive and a risky investment tool continue to persist. However, over the last few years, ULIP plans have emerged as a preferred investment vehicle... Read more...

All that you want to know about mortality charges in ULIP investment

All that you want to know about mortality charges in ULIP investment

Mortality Charge is the bone of contention in ULIPs because many consider it primarily an investment vehicle. However, the fact is that mortality charges... Read more...

What is a ULIP NAV?

What is a ULIP NAV?

A unique insurance-cum-investment tool, Unit Linked Insurance Plans (ULIPs), can help us meet our financial goals, while also providing insurance cover. These products are goal-oriented investments and their funds.... Read more...

What is a ULIP plan?

What is a ULIP plan?

It doesn't matter if your 20, 35 or 50. Whatever your age, you are sure to have certain life goals and dreams that you hope to fulfil. You may want to complete your MBA, or perhaps you want to make a down payment on your dream home.... Read more...

Avail Systematic Investment Plans for a more stable financial future

Avail Systematic Investment Plans for a more stable financial future

We all have various financial obligations like daily needs, school fees, and short trip with family or buying a fancy gadget where we require onetime payment for which money can be relatively collected easily... Read more...

    Contact Us

    Bajaj Allianz Life Insurance Company Ltd.
    Bajaj Allianz House, Airport Road, Yerawada, Pune - 411 006, Maharashtra

    Branch Locator

    Customer Care Timing :
    Monday to Saturday - 9.00AM to 7.00PM
    Customer Branch Visit Timings :
    9:00 AM to 3:30 PM on Weekdays

    Customer Care Toll free numbers :
    BSNL : 1800-233-7272 |
    TATA :
    1800-209-7272 |
    BHARTI :
    1800-103-7272 |
    RELIANCE :
    1800-3000-7272

    For online policy issuance / renewal :
    1800-209-4040

    Standard rate apply :
    (+91 020) 66026777

    Customer Service :
    customercare@bajajallianz.co.in

    Sales Enquiry :
    websaleslife@bajajallianz.co.in

    Cyber Cell :
    If you find any unauthorized or fraudulent sales material online, please mail us at :
    cyber.cell@bajajallianz.co.in

    BAJAJ ALLIANZ LIFE ONLINE INSURANCE PLANS

    Chat with us...