Human life value is calculated as the present value of your liabilities, investments, savings and future earnings. It indicates the life cover for your insurance plan that can secure your loved ones in the event of your unexpected demise.

If you are the family's breadwinner, the financial responsibilities will keep increasing at different stages in your life. Therefore, as a moral obligation, you must evaluate the possible expenses your family might incur in your absence to ascertain their financial well-being at any time.

With a human life calculator, you can determine this financial requirement by considering the different factors. It is a simple tool easy to understand and use. The value is calculated based on your inputs and displayed by the calculator almost instantly.

Human life value is a definite value that helps determine the life cover to help your family manage the financial crisis in the event of an unforeseen event that can lead to your death. The value represents the maximum life coverage for your life insurance plan based on your earnings, liabilities, assets, dependent family members, etc.

When you calculate human life value, you can determine an appropriate value of funds required for your family. It is important for the following reasons:

• An increase in family commitments and the rising cost of living can lead to financial inconsistencies if adequate financial planning is not done correctly.

• The payout from the life insurance plan will help your family clear off debts, accomplish major financial goals and handle routine expenses comfortably.

• Adequate funds to manage routine expenses and emergencies can help your family recover from the loss emotionally and live satisfactorily.
  
  

Therefore, calculate HLV at an early age and invest in life insurance plans to maximise the financial benefits for your family.

The human life value calculator is a simple tool that can evaluate the necessary coverage required for your life insurance plan to safeguard your family. The life coverage should be comprehensive enough to accommodate the possible expenditures and the increasing liabilities to help your family lead a peaceful life.

The HLV calculator is important to account for all these expenditures effectively. Here are a few pointers to help you understand the value of the human life calculator.

• Helps assess the current financial status and the life cover to account for the rising inflation rate.

• You can determine the increased financial requirements based on the changing family commitments such as a marriage, being blessed with a child, etc.

• You can determine if you need another life insurance plan based on the value derived from the human life calculator.

• If another life insurance plan is required, you can determine the extent of life cover for the same based on the value derived from the human life value calculator.

The human life value calculation estimates the financial value of your entire life. It is based on 7 important factors:
 

• Your present age

• Your gender

• Your occupation

• Your target retirement age

• Your annual income

• Your employment benefits

• Financial information about your dependent family.

You can determine the human life value based on these factors and current savings and liabilities. Therefore, when you calculate HLV, you must consider your present income, expenditure, savings, investments, and other future liabilities. You can take into account your current lifestyle and future money goals, such as your child's marriage, education, etc., to determine this financial information effectively. For example, you can consider the expenses incurred towards regular grocery, medical, utility, entertainment and other future liabilities such as clearing off debts, repayment of loans, etc.
 

There are different ways to determine the human life value and the life cover. It is based on two methodologies.
 

• Based on income - Using this method, you can determine the regular income required by your family in case of your unexpected death. Therefore, it is also called the income replacement method.

• Based on expenses/needs - Another best way to calculate the human life value is by determining the future expenses, considering the regular household expenditure, loans, and other money goals such as your child's education, marriage, etc.

Determining how much life insurance is enough is based on individual financial needs. However, the exact and required life cover should help your family manage their routine expenses and fulfil future family commitments satisfactorily. Also, the life cover should be able to clear off debts and help your family repay all the applicable loans.
 

The human life value is exact and provides an insight into the required life coverage. Once you have derived the required coverage, you must devise strategies to afford it. For example, you can either revise the values of your expenses and liabilities to reduce the life cover or choose a longer policy term to make the premium cheaper.
 

While determining the exact life cover, you must be precise while calculating the expenses. You can work on a budget based on your income and expenses. List down different sources of income and expenses. Allocate a specific fund for personal expenses such as grocery, entertainment, medical, etc., and try not to exceed it. In that way, you can set a lifestyle and determine the exact funds required by your family even in your absence. Along with these routine expenses, you must include your money goals and most importantly account for the inflation rate.
 

Based on these expenditures, you can consider the different traditional and comprehensive life insurance plans to determine the exact and sufficient coverage that can suffice for the required financial needs. For example, you can choose the savings insurance plan for a life cover with guaranteed returns or the ULIP plan for a life cover with market-linked returns.