What is Hlv value?

Human Life Value CalculatorHaving a life insurance cover is of utmost importance. It ensures that your family and loved ones are taken care of even after you. Life insurance also c

What is Hlv value?

Human Life Value Calculator

Having a life insurance cover is of utmost importance. It ensures that your family and loved ones are taken care of even after you. Life insurance also covers any unpaid loans (home or vehicle), insurance premiums, etc. that are unpaid. Selecting the best life insurance policy is one of the toughest and most essential financial decisions one makes in life. Several factors are to be considered before zeroing in on a policy. Factors such as future income, expenses, liabilities, etc. that may befall on your family in your absence. This is known as Human Life Value in life insurance parlance.

Human Life Value or HLV is the number that gives you an estimated value of a persons lifelong earnings. For example, a person starts working at the age of 22 years and works up to the age of 62 years. If s/he earns approximately 1 crore during their working years, then Rs 1 crore is their HLV. Do note that this is still an estimate of how much the person must earn to lead a secure and fulfilled life while taking care of their dependents. Furthermore, this value indicates the financial loss the family will suffer in case of the untimely death of the sole earner.

With the help of HLV one can determine the value of life insurance they will need for giving complete financial protection to your family.

How is Human Life Value calculated?Human life value is calculated based on four basic parameters:1.

Personal Profile Here the person is required to put in two pieces of information i.e.

a. Your age at the time of purchasing the policy as per your birth certificate.
b. Expected age at the time of your retirement. Although salaried people retire at the age of 60/65 years, most self-employed people tend to work longer.


Total Savings It is important to ascertain how much savings you have before finalizing an amount for life insurance. This includes:

a. Amount of ready-to-use liquid money in your bank account.
b. The current value of all the fixed deposits in your possession.
c. Details of other savings or investments done by you in the form of mutual funds, bonds, gold, RDs, etc.


Liabilities Under this, you will have to declare the following things:

a. Provide complete details of any outstanding home loan taken by you and for which the repayment has not been completed yet.
b. Details regarding any personal loan that is taken under your name. Mention the amount of total number of EMIs that must be paid in the future.
c. Any vehicle loan that is still running and the total number of EMIs left.
d. Apart from the above three, if any other outstanding debts are remaining.


Income A persons income is calculated by putting together the data from the following fields:
a. Salary  Fill in the net salary amount that you draw from your employer every year. Net salary is the amount you receive before adding the benefits that are listed on your pay sheet. Be very careful while entering this number as this will determine the value calculated by the HLV.
b. Other income sources  Apart from the salary, there are other sources a person can earn from. Such as:

i. Income generated from the property/house owned
ii. Annual profit or gain from any business owned
iii. Profit earned by selling stock, real estate, or bonds
iv. Others
c. Mention the total value of any existing life insurance purchased by you. This will include any term plans, regular insurance policies, or even ULIPs with life cover benefit.The amount reflected by the HLV calculator after you have submitted all the required details includes all your future:

a. Your total earnings (from salary and other sources) if you remain alive until your working age.
b. All the expenses and liabilities that might occur. This also takes into account the inflation part.
c. Any unpaid or outstanding investment or loan EMIs.
d. Provisions for any health, education, or general life-related exigencies.Some common features of the HLV are

1. It is a dynamic number that changes with the fluctuations in the input data such as income, expenses, and liabilities.
2. It takes into account all the relevant data such as your age, your retirement age, your income, and your liabilities to help you determine the correct life cover.Knowing your human life value may benefit you in the following ways:

1. While taking any life insurance policy, it is important to know your economic worth based on your life stage and financial goals. HLV helps you in determining that.
2. Helps you choose the right cover that will help your family and loved ones, sail through the difficult times in your absence.

The eligibility criteria for getting life insurance could depend on the insurer and plan you select. While the HLV calculator will help you determine the coverage that will be appropriate for you, youll need to check with the insurer if you are eligible for a policy. Most insurers set the age limit between 18 and 65 years for getting a policy. However, some plans and benefits may come with an earlier age limit such as 50 years. Moreover, the maximum maturity age of most policies is usually 85 years.

Using the HLV calculator is simple and easy. All you have to do is enter the required fields such as your age, income, savings, and liabilities and the calculator will do the rest for you. Once you have entered all the fields, the calculator will use its intelligent algorithm to produce a figure that is the most appropriate life cover according to your profile.

It is important to note that HLV is a dynamic number and it changes with time as one vital component to calculate is your age. Additionally, any kind of changes in the economy or your earning will change the HLV. So, it is beneficial to calculate your HLV every year. This will further enable you in providing the right and sufficient cover for your family.

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