It is important to be prepared for the worst considering how uncertain life is. And one should not forget life insurance while preparing for the worst as it can protect your family financially if an unfortunate event leads to your untimely death.
However, choosing an appropriate life insurance policy is very important to make sure there is no compromise that your family has to make after you are gone. The right policy gives your family the financial security they need to accomplish their objectives. This is why you must calculate the ‘Human Life Value (HLV)’ while buying the insurance policy.
What is Human Life Value (HLV)?
The physical damage to your car after an accident is simple to measure. But what if something bad were to happen to you? How would one measure your worth? This is where HLV comes into the picture.
The current worth of all the predicted future earnings you are expected to make for your family members is what is known as the "Human Life Value." It is, in other words, your projected income up to retirement. HLV determines the financial loss that your family will experience in the event of an unfortunate event that leads to your death.
It is the insurance coverage your family would require to live stress-free after your passing. In essence, it is the sum of money your loved ones would need to exist while maintaining their standard of living and pursuing their ambitions, after your death.
How is HLV calculated?
An HLV calculator may be used to estimate the economic worth of human life. To determine the appropriate insurance coverage needed, you must take into account a number of variables, including your current and retirement ages, your monthly costs, your projected future spending, and your debt obligations.
HLV calculator is a free online tool that assists in determining the amount needed to adequately replace the lost income in the case of the death of a family member who is a source of income. The HLV calculator assigns a value to human life, making it easier to purchase insurance protection.
A few HLV calculators may additionally require the details of any current coverage. The main goal of the HLV calculator is to provide you with an estimate of the amount of coverage required to safeguard your loved ones' financial future.
Summing up
It's critical to be aware that this value is dynamic. Your life stage, family situation, and yearly income affect the number. When you compute your human life number at age 25 while single, the value will be different than when you calculate it at the age of 35 while being married and having a family. As a result, it is essential to check the computation frequently rather than considering it a one-time task.
Your life is inestimably valuable and cannot be measured. However, life is also uncertain and if the worst-case situation occurs and your household suffers a loss of income, HLV assigns a monetary value to your life.
