Deciding on how much term insurance cover you should get is a crucial decision and should be taken very carefully!

You need to have adequate coverage to cover all your liabilities (like home loans), living expenses of your family for at least 30 years and the future goals like a child’s marriage, their education, etc. after factoring in inflation too!

For example, if you need Rs. 20 lakhs in today’s value on your child’s marriage, assuming you have 10 years to the event and a 7% rate of inflation, you would need an inflation-adjusted sum of at least Rs. 39 lakhs after 10 years.

While all this calculation might be complicated, the general thumb rule to find the cover is –

Your outstanding liabilities + 300 times your monthly expenses (minus EMIs) + 3 times the current cost of the goals.

Once you have that number, round it off to the next highest number. It is better to be over insured rather than being under-insured.