How much do I insure myself for? Assuming that the prevailing interest rate is 8%, you need to insure your life for at least 12 times your current annual income. 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.