Many young professionals assume their existing cover is sufficient. However, the question they need to ask is ‘how much term insurance do I need’, to adequately protect their family from outstanding liabilities and future financial goals.

A life cover of Rs 50 lakh can sound substantial at 28. You may have just received an appraisal, begun an SIP, and perhaps taken a home loan with the confidence that your career is still on an upward curve. But life cover is not meant to reflect where your income stands today alone. It needs to account for the financial responsibilities your family would have to manage if your income stopped unexpectedly.

Consider a 28-year-old startup employee earning Rs 15 lakh a year. He has Rs 50 lakh of existing cover: Rs 20 lakh through his employer and a Rs 30 lakh individual policy. On paper, he is insured. In reality, he could still have a protection gap of Rs 1.2 crore.

Employer-provided insurance is useful, but it is usually linked to your job. If you switch companies, take a career break, or lose your job, that cover may not continue. An individual term Insurance policy is portable because it stays with you as long as you pay the premiums and meet the policy conditions.

The bigger issue is that many people choose a round figure without calculating their actual financial responsibilities. A Rs 50 lakh cover may have been enough when you were single and had no loans. It may be inadequate once you have a home loan, parents who depend on you, a spouse, or plans for children.

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