Human Life Value

It is difficult to place monetary value on a human being’s life.

Get the Right Coverage

It is difficult to place monetary value on a human being’s life; however, you must calculate it to assess the financial loss that your family would incur in case you were to pass away today.

Human life value is an assessment of the financial value of your life. In insurance parlance, this value is used to determine the amount of insurance that you should buy to protect and maintain the lifestyle of your surviving dependents. Simply put the sum insured must equal the human life value.

Factors considered while deriving HLV:

The human life value (HLV) concept takes into account four factors to determine how much life cover will be needed to protect your family and assets

  • Annual Income
  • Annual Expenses
  • Years left until your retirement,
  • Expected value of the current rupee at the end of this period factoring for inflation.

The most common way to determine HLV is to estimate your income each year until you expected retirement, say 65 years. You should then discount this income stream for inflation and express it in current terms. To simplify the estimation process assume that your income will increase in line with inflation. Then human life value will be your current income multiplied by the number of years until you turn 65. So, for a 50-year-old the human life value will be 15 times the current income.

At ANAR Insurance, we have expertise in calculating the Human Life Value. We study your needs & accordingly suggest a financial plan.