Protection planning is arithmetic. The requirement comes from four inputs: the income the family would need replaced, the number of years they would need it, the liabilities that must be cleared, and the goals that must remain funded.
Start with income replacement
Take annual household expenses that depend on the earning member and multiply by the number of years dependents would rely on that income. A family spending ₹9 lakh a year with 18 years of dependency has an income replacement requirement of roughly ₹1.6 crore before any adjustment.
Add liabilities, then subtract what exists
Outstanding home, business and personal loans should be added in full — the family should not inherit both a loss of income and a repayment obligation. Then subtract existing life cover and liquid assets that would genuinely be available.
What remains is the gap. In most first assessments we conduct, the gap is larger than the family expected, and closing it costs less than they assumed.
Two frequent oversights
Health cover is often sized against hospitalisation costs from a decade ago. And nominations are frequently outdated after marriage, births or property purchases — a documentation issue that can delay claims materially.
This article is educational in nature and does not constitute investment, tax or legal advice. Please consider your own circumstances and seek professional guidance before acting.