Post by Acko

Indian life insurance covers 8 months of a household's income. Indian families need 10 to 15 years of it. Both are true. The gap is the story. The average life cover held in India today is roughly 8 months of household income (NIA Pune research; IRDAI 2024-25 data). The benchmark for what a family actually needs if the earner died tomorrow covering ongoing expenses, education, debt, and a buffer until dependents are self-sufficient is 10 to 15 years of income. For a household earning ₹15 lakh a year, that's the difference between roughly ₹10 lakh of cover (held) and ₹1.5 to ₹2.25 crore of cover (needed). A 15x to 22x shortfall. The cost of closing that gap is the most counter-intuitive number in this conversation. A healthy 30-year-old can buy ₹1 crore of pure term cover, for a 30-year tenure, at roughly 1 to 2% of annual household income. Protection worth 6 to 7 years of household income for the cost of one or two months' EMI on a mid-segment car loan. The reason the gap stays open isn't price. It's product confusion. India's household-savings instinct routes through endowment plans, money-back, and ULIPs products that return something if you live, which feels comforting but is expensive in coverage terms. The life cover in case of an untimely death thins out with every layer of investment-shaped wrapper. A term policy doesn't pay anything if you live. That's the feature. Worth running your own numbers. The gap may be smaller than it looks.