Human Life Value Calculator
Estimate the economic value of your future earnings to your family, to size a term insurance policy.
About the Human Life Value Calculator
Human life value (HLV) is the present value of the income your family would lose if you died, after removing what you spend on yourself. Indian insurers and the IRDAI-recommended needs analysis often use it to set the maximum sum assured.
The formula
HLV = Σ (income × (1 − self share) × (1 + g)^(t−1)) ÷ (1 + r)^t
- g
- income growth rate
- r
- discount rate
- t
- each year until retirement
Worked example
Example: Human life value = ₹1,90,21,904
- Inputs: Current age: 35 years; Retirement age: 66 years; Yearly income: ₹13,00,000; Spent on yourself: 33%; Expected yearly income growth: 7%; Discount rate (expected investment return): 9%; Existing life cover: ₹0.
- Formula: HLV = Σ (income × (1 − self share) × (1 + g)^(t−1)) ÷ (1 + r)^t
- Result: Human life value = ₹1,90,21,904
- Cover gap: ₹1,90,21,904
- Multiple of income: 14.6×
Questions people ask
Is HLV the cover I should buy?
It's the upper bound insurers usually allow; your actual need may be lower if you have savings.
Why discount future income?
A lump sum paid now can be invested, so it needs to be less than the total of future income.