The first thing that every term insurance buyer should consider is the amount of coverage required to meet the family's future needs.
To discover more about this, you can use term insurance calculators accessible online.It helps to determine how much to invest each month as a premium, so the family's future needs are satisfied when you are not around.The most popular term policy calculation is sum around 15 times the insured person's annual salary, which may be calculated manually using the thumb rule of term policy calculation.According to this procedure, a person's life or term insurance should be 15 times their yearly wage.
So, if Mr.A's yearly income is Rs. 12 lakh, he will need term insurance worth 1.8 crore rupees.However, the second step is also included in this equation, which requires one to identify the necessary coverage from term life insurance for covering their other financial obligations, such as the policyholder's children higher education.
For example, Mr.A's total financial obligations are Rs.50 Lakh, and he wants a life or term insurance policy that provides him with coverage of Rs.2.3 Crore(rounded to the nearest lakh).