Financial Calculators
Human Life Value Calculator
Your income has a present value. Insure that, not a round number.
Your human life value
₹1,95,98,777
today's value of everything you would have provided
- Family's share of income now
- ₹10,50,000
- Existing cover
- ₹50,00,000
- Additional cover to consider
- ₹1,45,98,777
The income-replacement method: each future year's income, net of what you spend on yourself, is discounted back to today. Add outstanding loans and specific goals on top if they are not already funded. Group cover such as AGIF or AFGIS counts as existing cover only while you are serving.
These figures are for illustrative purposes only and are not investment advice. Please consult your investment adviser for investment related advice.
Replacing what you would have earned
The human life value method asks a blunt question: if you were not there, how much money would replace everything you would have provided until retirement? Each future year's income is reduced by what you would have spent on yourself, grown for expected raises, and discounted back to a lump sum that could be invested safely today to produce the same stream.
It is the income-side answer; the Term Insurance calculator gives the needs-side answer from expenses, goals and loans. When they disagree, the larger figure is usually the safer one.
Present value of net future income
HLV = sum for y = 1..N of [ income x (1+g)^(y-1) x (1 - personal share) ] / (1+d)^y\nAdditional cover = HLV - existing coverWorked example: on Rs 15,00,000 a year growing 6% for 25 more working years, with 30% spent on yourself and an 8% discount rate, the human life value is Rs 1,95,98,777. With Rs 50,00,000 of existing cover, the additional cover to consider is Rs 1,45,98,777.
Frequently asked questions
What discount rate should I use?
The return the family could safely earn on the payout: a long-term government bond or good FD rate, not an equity return. A lower rate gives a higher, more conservative cover.
Does AGIF or AFGIS cover count?
Yes while serving, but it ends at retirement or release. Anyone planning to work after service should treat it as temporary and price term cover that outlasts it.
Should I add loans and goals?
If the income stream would have serviced them, they are already inside the HLV. Add them separately only where they exceed what the income would have covered, such as a large outstanding home loan.
Is more cover always better?
Beyond the need, premiums are money that could be invested. The point of the calculation is to buy enough, not the maximum the insurer will sell.
Cover the income, protect the plan.
We size term cover from both methods and place it with an insurer whose claim record we trust.