Is ₹1 crore enough? Why urban families may need ₹1.5 crore or more in term insurance
Rising living costs, medical inflation and growing financial responsibilities are changing how much life insurance Indian families need. According to Tata AIA Life Insurance, a ₹1 crore term cover may no longer be sufficient for many urban households, with ₹1.5 crore increasingly emerging as the new benchmark.
- Jun 12, 2026,
- Updated Jun 12, 2026 8:10 AM IST
Rising household expenses, medical inflation and growing financial responsibilities are prompting many Indian families to rethink a long-held benchmark in financial planning: the ₹1 crore term insurance cover.
According to Shruti Oke, Senior Vice President and Head of Product Management at Tata AIA Life Insurance, what was once considered adequate protection may no longer be sufficient for many urban and salaried households.
"At Tata AIA, our view is that ₹1 crore may no longer be enough for many urban and salaried households. In fact, what was earlier considered a ₹1 crore protection need should now be looked at closer to ₹1.5 crore or more, depending on the customer's income, liabilities and family responsibilities," Oke said.
She attributed the shift to rising household expenses, children's education costs, home loans, healthcare inflation and evolving lifestyle aspirations.
"Term insurance is not just a number; it is a promise that the family's lifestyle, children's education, loans and future goals remain protected even if the earning member is no longer around," she said.
MUST READ: India set to be world's fastest-growing insurance market, premiums seen tripling by 2036: Report
According to Oke, consumers should move beyond asking whether ₹1 crore is enough and instead focus on whether the amount would allow their families to maintain their standard of living without financial compromise.
"For many families today, ₹1.5 crore is becoming the new ₹1 crore," she said.
Buying early matters
Oke said purchasing term insurance early is one of the most important financial decisions young earners can make.
While people in their 20s may not yet have significant financial responsibilities, commitments tend to increase over time with marriage, home ownership, children, elderly parents and long-term goals.
"The biggest advantage of buying early is that premiums are significantly more affordable at a younger age. A healthy 25- or 28-year-old can lock in a high cover at a much lower premium compared to someone buying the same cover later in life," Oke said.
She added that early purchases provide longer protection and help preserve long-term insurability.
MUST READ: Accident cover to pension: What govt's social security push means for gig workers
"At Tata AIA, we encourage consumers to view protection as an early financial discipline rather than a late-stage necessity. Starting early allows individuals to secure affordability, preserve long-term insurability and build a protection foundation that can support future life goals," she said.
How to calculate the right cover
According to Oke, term insurance coverage should be calculated with the same seriousness as any long-term financial plan.
A common thumb rule suggests coverage equivalent to 10 to 15 times annual income, but she said this should be tailored to individual circumstances.
Home loans, children's education expenses, regular household costs and financial support for ageing parents can all affect the amount of protection required.
"Two individuals with similar incomes may therefore require very different protection levels depending on their responsibilities," Oke said.
She also stressed the importance of choosing a policy tenure that aligns with an individual's active earning years and peak periods of financial responsibility.
DID YOU KNOW: BT Explainer: Term Insurance — When to buy, ideal cover, key factors simplified
Protection cover
Oke noted that insurance requirements rarely remain static and that modern term plans increasingly offer flexibility to adapt to changing life stages.
"Features such as Life Stage Benefits are designed precisely for this purpose. They allow individuals to enhance coverage at key milestones such as marriage, childbirth or home loan disbursal, ensuring that protection remains aligned with changing family and financial realities," she said.
For someone who purchases a policy early in their career, additional protection may become necessary as liabilities increase and the family expands.
"The broader shift is encouraging consumers to see insurance not as a one-time decision, but as a protection framework that adapts with changing aspirations and responsibilities," Oke said.
As inflation and family expenses continue to rise, the traditional ₹1 crore benchmark is losing relevance, making periodic reviews of life insurance coverage increasingly important for Indian households.
MUST READ: Govt opens insurance sector: 100% FDI allowed via automatic route
Rising household expenses, medical inflation and growing financial responsibilities are prompting many Indian families to rethink a long-held benchmark in financial planning: the ₹1 crore term insurance cover.
According to Shruti Oke, Senior Vice President and Head of Product Management at Tata AIA Life Insurance, what was once considered adequate protection may no longer be sufficient for many urban and salaried households.
"At Tata AIA, our view is that ₹1 crore may no longer be enough for many urban and salaried households. In fact, what was earlier considered a ₹1 crore protection need should now be looked at closer to ₹1.5 crore or more, depending on the customer's income, liabilities and family responsibilities," Oke said.
She attributed the shift to rising household expenses, children's education costs, home loans, healthcare inflation and evolving lifestyle aspirations.
"Term insurance is not just a number; it is a promise that the family's lifestyle, children's education, loans and future goals remain protected even if the earning member is no longer around," she said.
MUST READ: India set to be world's fastest-growing insurance market, premiums seen tripling by 2036: Report
According to Oke, consumers should move beyond asking whether ₹1 crore is enough and instead focus on whether the amount would allow their families to maintain their standard of living without financial compromise.
"For many families today, ₹1.5 crore is becoming the new ₹1 crore," she said.
Buying early matters
Oke said purchasing term insurance early is one of the most important financial decisions young earners can make.
While people in their 20s may not yet have significant financial responsibilities, commitments tend to increase over time with marriage, home ownership, children, elderly parents and long-term goals.
"The biggest advantage of buying early is that premiums are significantly more affordable at a younger age. A healthy 25- or 28-year-old can lock in a high cover at a much lower premium compared to someone buying the same cover later in life," Oke said.
She added that early purchases provide longer protection and help preserve long-term insurability.
MUST READ: Accident cover to pension: What govt's social security push means for gig workers
"At Tata AIA, we encourage consumers to view protection as an early financial discipline rather than a late-stage necessity. Starting early allows individuals to secure affordability, preserve long-term insurability and build a protection foundation that can support future life goals," she said.
How to calculate the right cover
According to Oke, term insurance coverage should be calculated with the same seriousness as any long-term financial plan.
A common thumb rule suggests coverage equivalent to 10 to 15 times annual income, but she said this should be tailored to individual circumstances.
Home loans, children's education expenses, regular household costs and financial support for ageing parents can all affect the amount of protection required.
"Two individuals with similar incomes may therefore require very different protection levels depending on their responsibilities," Oke said.
She also stressed the importance of choosing a policy tenure that aligns with an individual's active earning years and peak periods of financial responsibility.
DID YOU KNOW: BT Explainer: Term Insurance — When to buy, ideal cover, key factors simplified
Protection cover
Oke noted that insurance requirements rarely remain static and that modern term plans increasingly offer flexibility to adapt to changing life stages.
"Features such as Life Stage Benefits are designed precisely for this purpose. They allow individuals to enhance coverage at key milestones such as marriage, childbirth or home loan disbursal, ensuring that protection remains aligned with changing family and financial realities," she said.
For someone who purchases a policy early in their career, additional protection may become necessary as liabilities increase and the family expands.
"The broader shift is encouraging consumers to see insurance not as a one-time decision, but as a protection framework that adapts with changing aspirations and responsibilities," Oke said.
As inflation and family expenses continue to rise, the traditional ₹1 crore benchmark is losing relevance, making periodic reviews of life insurance coverage increasingly important for Indian households.
MUST READ: Govt opens insurance sector: 100% FDI allowed via automatic route