Half of India's Life Covers Under ₹2L: Is Yours Enough?

Most Indians have life insurance, but over half hold policies that pay out ₹2 lakh or less — barely enough to cover a few months of living costs. Here's how to check if your family is truly protected.

Here's what happened: IIB data shows life insurance policies with sum assured above ₹50 lakh grew 68% between FY2021 and FY2025, signalling rising awareness among higher-income buyers.. Despite this growth at the top, more than half of all active life insurance policies in India still carry a sum assured of ₹2 lakh or less — far below any meaningful income-replacement threshold.. The skew reflects decades of low-cover endowment and traditional savings-linked policies sold to mass-market buyers, where the focus was on premiums collected, not protection delivered..

What you should do: Check your existing policy documents or insurer's app today and note your exact sum assured — compare it to 10 times your annual take-home income to see the real protection gap.. Get a fresh term insurance quote online (PolicyBazaar, Ditto, or directly with IRDAI-registered insurers) — a ₹1 crore pure term plan for a 30-year-old non-smoker costs under ₹900/month.. If you hold an old endowment or money-back policy with low cover, consult a fee-only SEBI-registered financial advisor before surrendering — there may be a paid-up or conversion option worth exploring first..

Pro tip: When buying term insurance, choose a cover that runs until age 60-65, not just 40 — most income-replacement need peaks in your 50s when EMIs, kids' education, and ageing parents overlap.

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