Neutral impactSector
Term insurance maths: Forget the 10x rule, here is what you actually need to avoid being underinsured
Mint 1 hr ago·24 Sept 2026, 5:46 pm
The common advice of buying life insurance coverage worth 10 times your annual income is outdated and often insufficient. This simple rule fails to account for inflation, your existing debts, and the changing financial needs of your family over time. Instead of relying on a fixed multiple, investors should calculate their coverage based on their actual financial liabilities and future requirements to ensure their loved ones remain financially secure.
This shift in perspective is crucial for retail investors as it helps in avoiding the risk of being underinsured. By accurately assessing the total financial gap, one can choose a policy that provides adequate protection without overpaying. It is a practical step toward long-term financial planning and peace of mind.
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