HLV Calculator — Human Life Value

Calculate the present value of your future net earnings to find the scientifically correct life insurance cover amount.

Your details

Current age: 30 years

Retirement age: 60 years

Annual income: ₹10,00,000

Annual income growth: 6%

Personal expense ratio: 20%

Discount rate: 8%

Existing life cover: ₹0

Your Human Life Value

Net HLV

8% discount

₹1,85,42,614

30 working years remaining

Gross HLV

₹2,31,78,267

Additional cover needed

₹1,85,42,614

Comparison: rule-of-thumb methods

Income x 10₹1,00,00,000

Income x 15₹1,50,00,000

HLV method (scientific)₹1,85,42,614

Year-by-year HLV breakdown

Year	Net income	PV of net income	Cumulative HLV
1	₹8,00,000	₹8,00,000	₹8,00,000
2	₹8,48,000	₹7,85,185	₹15,85,185
3	₹8,98,880	₹7,70,645	₹23,55,830
4	₹9,52,813	₹7,56,374	₹31,12,203
5	₹10,09,982	₹7,42,367	₹38,54,570
6	₹10,70,580	₹7,28,619	₹45,83,189
7	₹11,34,815	₹7,15,126	₹52,98,315
8	₹12,02,904	₹7,01,883	₹60,00,198
9	₹12,75,078	₹6,88,885	₹66,89,083
10	₹13,51,583	₹6,76,128	₹73,65,212
11	₹14,32,678	₹6,63,607	₹80,28,819
12	₹15,18,639	₹6,51,318	₹86,80,137
13	₹16,09,757	₹6,39,257	₹93,19,394
14	₹17,06,343	₹6,27,419	₹99,46,812
15	₹18,08,723	₹6,15,800	₹1,05,62,612
16	₹19,17,247	₹6,04,396	₹1,11,67,008
17	₹20,32,281	₹5,93,204	₹1,17,60,212
18	₹21,54,218	₹5,82,218	₹1,23,42,430
19	₹22,83,471	₹5,71,436	₹1,29,13,866
20	₹24,20,480	₹5,60,854	₹1,34,74,721
21	₹25,65,708	₹5,50,468	₹1,40,25,189
22	₹27,19,651	₹5,40,274	₹1,45,65,463
23	₹28,82,830	₹5,30,269	₹1,50,95,732
24	₹30,55,800	₹5,20,449	₹1,56,16,182
25	₹32,39,148	₹5,10,811	₹1,61,26,993
26	₹34,33,497	₹5,01,352	₹1,66,28,345
27	₹36,39,506	₹4,92,068	₹1,71,20,413
28	₹38,57,877	₹4,82,955	₹1,76,03,368
29	₹40,89,349	₹4,74,012	₹1,80,77,380
30	₹43,34,710	₹4,65,234	₹1,85,42,614

Frequently asked questions

Human Life Value is the present value of all future net earnings a person is expected to generate until retirement, discounted to today's value. It represents the maximum economic loss your family would suffer if you were to die prematurely. In simpler terms, HLV is the amount your family needs invested today to replace your income stream for the rest of your working life.

HLV = sum of [Net income in year t / (1 + discount rate)^t] for t from 0 to (retirement age - current age). Net income is gross income minus personal expenses (the portion you spend on yourself, typically 20%). The discount rate represents the return your family could earn on the insurance proceeds, usually 6-8% (conservative FD or savings rate).

The income replacement method is a shortcut: multiply annual income by 10-15x. HLV is more precise: it calculates the exact present value of your future earning stream, accounting for income growth (salary increments), personal expense ratio, discount rate, and your specific number of working years. HLV typically gives a higher and more scientifically justified cover amount.

IRDAI (Insurance Regulatory and Development Authority of India) recommends the HLV method as the basis for determining appropriate life insurance cover because it provides a precise, needs-based calculation rather than a generic rule of thumb. It ensures the family receives a corpus that, when invested prudently, can genuinely replace the policyholder's future income stream.

Use a conservative rate that reflects what the family can safely earn on the insurance proceeds after payout: typically 6-8%, in line with FD rates or conservative debt fund returns. Avoid using equity return assumptions (12%+) because the family should not be forced to take equity risk with insurance money. The default of 8% in this calculator is a reasonable starting point.

Related calculators

HLV is the present value of future net earnings at a 8% discount rate, growing at 6% per year, with 20% deducted as personal expenses. This is an estimate for life insurance planning and not a guarantee of future income.

Year

Net income

Split

PV of net income

Cumulative HLV

₹8,00,000

₹8,48,000

₹7,85,185

₹15,85,185

₹8,98,880

₹7,70,645

₹23,55,830

₹9,52,813

₹7,56,374

₹31,12,203

₹10,09,982

₹7,42,367

₹38,54,570

₹10,70,580

₹7,28,619

₹45,83,189

₹11,34,815

₹7,15,126

₹52,98,315

₹12,02,904

₹7,01,883

₹60,00,198

₹12,75,078

₹6,88,885

₹66,89,083

₹13,51,583

₹6,76,128

₹73,65,212

₹14,32,678

₹6,63,607

₹80,28,819

₹15,18,639

₹6,51,318

₹86,80,137

₹16,09,757

₹6,39,257

₹93,19,394

₹17,06,343

₹6,27,419

₹99,46,812

₹18,08,723

₹6,15,800

₹1,05,62,612

₹19,17,247

₹6,04,396

₹1,11,67,008

₹20,32,281

₹5,93,204

₹1,17,60,212

₹21,54,218

₹5,82,218

₹1,23,42,430

₹22,83,471

₹5,71,436

₹1,29,13,866

₹24,20,480

₹5,60,854

₹1,34,74,721

₹25,65,708

₹5,50,468

₹1,40,25,189

₹27,19,651

₹5,40,274

₹1,45,65,463

₹28,82,830

₹5,30,269

₹1,50,95,732

₹30,55,800

₹5,20,449

₹1,56,16,182

₹32,39,148

₹5,10,811

₹1,61,26,993

₹34,33,497

₹5,01,352

₹1,66,28,345

₹36,39,506

₹4,92,068

₹1,71,20,413

₹38,57,877

₹4,82,955

₹1,76,03,368

₹40,89,349

₹4,74,012

₹1,80,77,380

₹43,34,710

₹4,65,234

₹1,85,42,614

HLV Calculator — Human Life Value

Frequently asked questions

What is Human Life Value (HLV)?

How is HLV calculated?

What is the difference between HLV and income replacement method?

Why does IRDAI recommend the HLV method?

What discount rate should I use for HLV?

HLV Calculator — Human Life Value

Frequently asked questions

What is Human Life Value (HLV)?

How is HLV calculated?

What is the difference between HLV and income replacement method?

Why does IRDAI recommend the HLV method?

What discount rate should I use for HLV?