How much is your life worth, on paper?
Two different methods, two different numbers. See how a Chartered Accountant and an insurance underwriter would each value your life cover, and why they differ.
30 years old
60 years — 30 working years remaining
30% on yourself · 70% supports your family
6% per year
Calculations assume a standard 6% discount rate for inflation and time value of money.
Chartered Accountant Method
Income replacement, present value
₹0
Based on ₹7,00,000 family contribution per year for 30 working years, adjusted for growth and inflation.
Insurer Method
Age based multiplier
₹0
Based on 20x your annual income for your age group.
The CA method suggests 5% more cover than the standard insurer multiplier.
Why two methods give different numbers
The CA method calculates the actual present value of your future income contribution to your family, accounting for growth, expenses, and inflation. The insurer method uses a simpler age based multiplier as a quick underwriting guideline. Neither is wrong, they answer slightly different questions. RiskPe can help you understand which number matters more for your actual situation.
What is Human Life Value
Human Life Value, commonly called HLV, is a financial planning concept used to estimate the ideal sum assured for a life insurance policy. It represents the present value of the income a person would have earned and contributed to their family over their remaining working years, had their life continued uninterrupted.
The HLV calculation method is widely used by financial planners, Chartered Accountants, and insurance underwriters across India to recommend an appropriate term insurance cover. Rather than picking a sum assured arbitrarily, the human life value formula ties your life insurance coverage directly to your actual income, expenses, and family's financial dependency on you.
There are two commonly used approaches to calculate human life value in India. The income replacement method, often used by Chartered Accountants and financial planners, calculates the present value of your future net income contribution to your family. The age based multiplier method, commonly used by insurers as a quick underwriting guideline, simply multiplies your annual income by a factor based on your age band.
Using a human life value calculator before buying term insurance helps you avoid two common mistakes, being underinsured with a sum assured far below what your family would actually need, or overpaying for cover significantly higher than necessary. RiskPe's HLV calculator shows both methods side by side so you can see the full picture before deciding on your term insurance coverage.
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