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Home> Insurance Guide > How much does life insurance cost?
How much does life insurance cost?
In order to buy a life insurance policy, you must pay premiums to the life insurance company. The amount of premiums payable depends upon the type of policy, term of policy contract, sum assured and your age.
You could pay these premiums monthly/ half-yearly/ annually/ or as a single premiums
How much do I insure myself for?
One of the simplest rules is to assume that insurance is a replacement for your lost earning capacity. Calculate your total income for the years that you expect to work.
Assuming that the prevailing interest rate is 8%, you need to insure your life for at least 12 times your current annual income. Assuming that a family needs Rs.100 annually for household expenditure and the rate of interest would be at 8%, then the breadwinner needs to have a life insurance policy of approximately Rs.1200. If the insurance amount were to be put in the bank by the family, the family would get a comfortable Rs.96 p.a., which would at least let the family maintain the current life style.
However to calculate your insurance need more precisely, use the following steps:
  • Calculate Monthly Livable Income required (Post tax). This is the monthly amount that the survivors of the policyholder will need in the event of his death. This is taken at 70% of the current total family expenses. Denote this as "M".
  • Calculate Monthly Income required (Pre tax) as M/ (100-t)%. Denote this as "M1". Here t = Tax rate.
  • Calculate Annual Income (A) = M1*12.
  • Assume Estimated-earning rate on capital as 8%. Denote this as "r".
  • Calculate Capital livable income required (C ) as A/ r%.
  • Subtract Existing Insurance Cover amount (if any) from "C".
  • The final amount you arrive at is the amount for which you should buy insurance.
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Life insurance gives an individual’s family the financial security needed and protects them from uncertainties and eventualities of life.

ULIPs or Unit Linked Insurance Plans for Kotak Life Insurance gives an individual the security of life insurance along with wealth creation opportunities. One can benefit from flexibility, liquidity, strategic savings, tax benefits and fund options that are inherent in a ULIP.

Retirement Plans from Kotak Life Insurance helps provide an individual with the financial security to lead a comfortable lifestyle in his post retirement years. Make use of the retirement calculator to assess your retirement options wisely.

Savings and Investment Plans from kotak Life Insurance are customized plans that help an individual achieve his / her long-term goals through smart financial planning.

Children Plans from Kotak Life Insurance help an individual secure his / her child’s financial future so that in future the child is able to fulfill every dream and aspiration without any hindrance

Group Life Insurance Plans from Kotak Life Insurance can help address the needs of both employees and employers, to secure their financial future.
Kotak Mahindra Old Mutual Life Insurance Ltd. A joint venture between Kotak Mahindra Bank Ltd. and Old Mutual plc.
9th floor, Godrej Coliseum, Behind Everard Nagar, Sion (E), Mumbai - 400 022

All rights reserved. Registered with Insurance Regulatory & Development Authority (IRDA) as Life Insurance Company. Regn. No. 107.
Insurance is the subject matter of the solicitation
Tax benefits available with life insurance are as per the Income Tax Act, 1961, and are subject to amendments made thereto from time to time.
For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale.