What is the Human Life value?

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The physical damage to your vehicle from an accident can be easily measured. Your insurance provider will pay for the damages.

It is simple to determine the cost of physical damage. But how do you quantify your value when something happens to you?

You can do this using the Human Life Value (HLV) concept. It is the value of all future earnings that you expect to make for your family members. It is also the expected income you will make until retirement. HLV is the economic loss that your family would suffer in the event of an unfortunate accident. Now that you have an understanding of this concept, it may interest you to learn more about the purpose of calculating human life value. This is useful in determining how much life insurance coverage you would need to provide financial security for your family. It takes into account your income, savings, expenses, liabilities, as well as your assets.

If you are the sole income earner, your family may lose its income. Insufficient savings may cause financial hardships and make it difficult for them to pay their regular expenses. This situation can be avoided by securing adequate life insurance.

Your survivors will be covered by the insurance company in the event of an unfortunate accident. This will provide financial stability for your family and allow you to pay your regular expenses, pay for your children's schooling, and repay any outstanding debts.

What amount of coverage should you get?

Next, the question could be: What is the human life value in terms of insurance? You can use a HLV calculator to determine this. To calculate the right insurance coverage, you need to take into account several factors. These are:
1. Current age and retirement age
2. Total savings
3. All monthly expenses, including home, medical, lifestyle, food and education.
4. Future expenses like buying a house, higher education for your kids, and planning their wedding
5. Outstanding debt and liabilities such as home loan, car loan, or personal loan
6. Current insurance cover purchased

If you do it manually, the calculation of your life value can be difficult. A human life value calculator is recommended.
A term plan is a cost-effective and easy way to provide financial security for your family during your absence. This policy is pure life insurance that provides benefits for your beneficiaries if you are unable to care for them. A term policy doesn't offer any maturity or survival benefits.

These are some of the many benefits of term plans:
• Higher amount guaranteed
• Affordable premium
• Additional riders can provide greater coverage
• If you don't smoke and live a healthy life, there is a discount on your premium

The HLV isn't constant and can change depending on your life stage. Changes in your family circumstances and annual income can also affect HLV.

The value of your insurance will change when you're young and single. It is vital that you use the HLV calculator regularly to assess your insurance needs at various stages of your life.

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