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Tata AIA Life Insurance Human Life Value Calculator

Tata AIA Life Insurance Human Life Value Calculator


Know the price of your life with a human life value calculator! It will help you determine the coverage required to protect your loved ones in your absence!

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Tata AIA Life Insurance Maha Raksha Supreme

Key benefits

  • Option for protection up to the age of 100
  • Accelerated payouts upon diagnosis of terminal illness
  • Flexibility to choose from different premium payment terms

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Financial responsibilities concerning your family's well-being require adequate planning. And, if you are the sole earning member in the family, the situation is even more crucial.

Therefore, evaluating the finances required to handle your family's routine expenses and other obligations becomes necessary; that is where your life cover plays an important role! And the human life value calculator is the simplest tool to determine the human life value in insurance.

What is Human Life Value?

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.

Why Do You Need to Calculate Your Human Life Value?

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.

Why is the Human Life Value (HLV) Calculator Important? 

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.

How is Human Life Value Calculated? 

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.

Human Life Value Formula 

You can calculate the HLV using the HLV formula:

  • 01.

    Calculate your current income.

    01.

    Calculate your current income.

  • 02.

    From this, subtract the income tax payments, expenses, and any insurance premiums

    02.

    From this, subtract the income tax payments, expenses, and any insurance premiums

  • 03.

    Identify the number of years that you have before your retirement

    03.

    Identify the number of years that you have before your retirement

  • 04.

    Determine the discounting factor and inflation rate

    04.

    Determine the discounting factor and inflation rate

  • 05.

    Ascertain the current value of the required stream of income after adjusting the inflation rate

    05.

    Ascertain the current value of the required stream of income after adjusting the inflation rate

 

Tata AIA Life Insurance Plans to Secure your Family 


 

How Much Life Insurance Coverage is Enough Coverage?

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.



Factors Which Affect the Amount of Life Insurance Cover

The human life value that determines the required life insurance cover amount is affected by many factors. 

  • Years of financial support required

    The number of years of financial support required by your family is crucial to determining the life insurance cover. You can calculate this value by subtracting your current age from the retirement age. In some families, the dependency might continue and last until death. Whole life insurance plans are ideal in such scenarios.

  • Monthly expenditure

    Monthly expenditure is a factor that you cannot avoid at any time. A sufficient life cover should cover the monthly expenditure and be able to afford emergency financial requirements considerably.

  • Future money goals

    You might dream of funding a new business initiative for your child, planning their grand wedding or paying for their higher education at a foreign destination. In your absence, they should be able to accomplish such dreams using the death benefit.

  • Current income

    Affordability is another crucial factor affecting your life cover. Choose a longer term for higher life coverage to reduce the premium rate and make it affordable.


Other Types of Calculator

There are many other types of calculators available to ease the process of calculating the life cover and premium to choose the right product as per your requirements.

Frequently Asked Questions (FAQs) About Human Life Value Calculator

Who is the man behind the invention of human life value?

Dr Solomon S Huebner introduced the concept of human life value. He made the HLV method a standard for calculating the insurance life cover. 

How to calculate HLV?

Every individual can calculate the human life value based on income or expenses. The income-based method considers the regular source of income required for the family in the absence of the breadwinner. The expenses-based method calculates the required life cover considering the future expenses and other money goals to satisfy the family's financial commitments.

What are the factors that help determine the human life value?

Many factors affect human life value, such as your income, assets, liabilities, years left to retirement, monthly expenditure, future financial goals, etc.,

Does the human life value remain the same throughout my life?

No, the human life value is subject to change based on the increasing or decreasing expenses and the quantum of loans availed. Therefore, at different milestones in your life, such as when you get married or blessed with children, purchase a new house, etc., your human life value will change. 

Should I extend my life cover if the HLV calculator displays a higher value?

You can utilise the customisable features of a life insurance plan to increase the coverage or purchase another life insurance plan based on the human life value. 

What is the human life value calculator?

A human life calculator is an online tool that helps derive the human life value that details the life coverage required to suffice your family's financial needs from a life insurance plan. 

What are the benefits of the HLV calculator?

The HLV calculator is an online tool that provides the following benefits: 

  • The HLV calculator provides the value of the life covered required in a life insurance plan.

  • It is a simple online tool easy to use.

  • The human life value is displayed instantly.

  • The inputs required by the HLV calculator are simple and easy to understand. 

What are the important pointers for consideration to assess the human life value?

The important factors that affect human life value are:

  • Your present age

  • Your gender

  • Your occupation

  • Your target retirement age

  • Your annual income

  • Your employment benefits

  • Financial information about your dependent family.

How do you determine life insurance coverage using the human life value?

The human life value derived from the HLV calculator is the extent of life coverage required to secure your family's financial needs. 

How to afford a higher life cover based on the calculation of the human life value?

If the human life value is higher and you find it difficult to afford it with a life insurance plan, you have two solutions.

  • Reduce the monthly expenditures, increase your savings and reduce availing of loans.

  • Purchase a life insurance plan early and choose a longer policy tenure. It will reduce the premium rate and make it extremely affordable.

How does the human life calculator work?

The human life calculator considers the present value of your future earnings, liabilities, assets, savings and investments to derive the life cover for your life insurance plan.

What is the income replacement method to calculate human life value? How is it different from the needs-based method?

The income replacement method calculates the human life value based on the regular income required by the family in the absence of the breadwinner. On the other hand, the needs-based method determines the human life value based on future money goals and other family financial needs. 

When should I calculate my human life value?

There is no definite time when you need to calculate your human life value. When you have started earning, increasing your liabilities, having a dependent family and wanting to secure your life for the benefit of your loved ones, you need to calculate your human life value. It will provide the life cover required for your life insurance plan. The earlier you determine your human life value, the higher the benefits and the cheaper the costs. 

How to use the HLV calculator?

Understanding and using the HLV calculator is simple and easy. Here are the most important steps:

  • Visit the official website of your life insurance provider.

  • Find the HLV calculator page.

  • Provide the basic details such as name, age, marital status, etc.,

  • Provide your income, expenses, liabilities, insurance and loan details.

  • Click on calculate to determine the life cover required to secure your family.

Why do insurers utilise the HLV method to determine life insurance cover?

Insurers can evaluate the financial risk by considering your income, expenses, liabilities and savings more precisely by using the HLV method to determine the life cover.

How does the HLV help choose the right life insurance plan?

Based on the human life value, you can understand the extent of life cover required. You can compare the life insurance plans such as term insurance, ULIP plan or guaranteed return insurance plans to ensure the life cover and the required financial benefits based on your future needs and purchase the most affordable product. 

Disclaimers

  • #66 lacs+ as on 31st March 2022

  • **4 Hour claim processing is applicable for Tata AIA Life Insurance working days (Monday to Friday) up to 2 pm and also bank working days subject to submission of completed documents.

  • *Individual Life Claim Settlement Ratio is 98.53% for FY 2021 - 22 as per the latest annual audited figures.

  • ~Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere on this site. Please consult your own tax consultant to know the tax benefits available to you.

  • For more details on risk factor, terms and conditions under the product, please read Sales brochure carefully before concluding a sale.

  • L&C/Advt/2022/Aug/1885