How much life insurance cover you should buy

When it comes to buying life insurance, one should at least have a sum assured of 20 times his annual income. This can include term insurance, other type of traditional investment insurance products. If you have annual income of Rs 5 lakh, you should at least have an insurance cover of Rs 1 crore. You should ideally buy a term life insurance over of Rs 1 crore. “Earlier the rule of thumb used to say that buy at least 10 times the annual income, due to high cost of life insurance. However, over a period of time the cost of purchasing term insurance has come down and the inflation is high. “Hence stick to 20 times the annual income rule,” says Deepak Yohannan, ceo, myinsuranceclub.com