Three rules . sizing the term cover
Universal . any earner with dependents
The brochure prints a multiple. The math prints the number. Buy the second.
01
Ten times income is a shelf number not your number.
It exists because round multiples sell easier than discount factors. It under-buys a 35 year old earner with a 25 year runway by a factor of two to three. The rule is a starting point not a finish line. Anyone who quotes it as the answer skipped the math.
02
Sum assured is the gap. Not a multiple.
Take the present value of future earnings the family loses. Subtract net worth they already have. That difference is the cover you actually need. Two earners with the same salary at different ages get different numbers. Twenty five year runway is not ten year runway.
03
Do not under-insure to save Rs 1700 a month.
Term is the cheapest financial product money can buy. The differential between an under-bought rule cover and a right-sized cover at age 35 runs about Rs 20000 a year. Rs 55 a day. Two filter coffees buy 2.6x the rupees the family sees. The leak is not the premium. The leak is the coverage gap.
The line
The brochure prints a multiple. The math prints the number. The premium gap between them is the cost of two coffees a day. The coverage gap is the rupees the family never sees.
Walk through the human capital math step by step. Sum assured calculator and concept module.
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