About the Human Life Value Calculator
The human life value (HLV) method sizes life insurance by asking a simple question: how much of your future paycheck does your family actually depend on, and what is that stream of money worth today? This calculator projects your after-tax income from now until retirement, removes the share you spend on yourself, grows it with expected raises and discounts it back to a single present-value figure.
It suits breadwinners, two-income couples and anyone who wants a more rigorous number than a rule of thumb like "10 times salary". Insurers and courts use the same economic idea when they value lost earnings, so the result is a sensible upper bound on how much income-replacement coverage you could justify.
The model assumes earnings are received once a year at the end of each year, that raises compound at a constant rate, and that the discount rate reflects what your beneficiaries could earn by investing a lump sum. It ignores employer benefits, Social Security survivor benefits and one-off needs such as funeral costs or paying off a mortgage — add those separately if you use a needs-based approach.
With the default inputs, the human life value is $848,893. Change any value above to recalculate instantly.
How to use the human life value calculator
- 1Enter your age, planned retirement age and current gross income.
- 2Set an expected annual raise and your average tax rate.
- 3Estimate the share of take-home pay you spend only on yourself.
- 4Choose a conservative discount rate your family could earn on a payout.
- 5Enter existing life insurance to see the remaining coverage gap.
Formula and method
C is the part of your first-year income that actually reaches your family: gross pay minus taxes minus the share you spend on yourself. Each later year grows by your expected raise g. Every year’s contribution is then discounted back to today at rate r, the return a lump sum could earn, and the discounted amounts are added together over the n years until retirement.
Payments are treated as arriving at the end of each year. When the raise rate equals the discount rate, the HLV is simply C × n ÷ (1 + r). The coverage gap is the HLV minus any life insurance you already own; it does not count savings, Social Security survivor benefits or employer death benefits.
- C
- Family share of first-year income
- g
- Annual income growth rate
- r
- Discount rate
- n
- Years until retirement
Worked examples
40-year-old earning $85,000
After 22% tax and 25% personal spending, $49,725 of the $85,000 salary supports the family. Growing that 3% a year for 25 years and discounting at 6% gives a human life value of about $848,900. With $250,000 already in force, the gap is about $598,900.
30-year-old earning $60,000, no coverage
Only $35,700 of income reaches the family each year, but there are 37 working years left and raises (3.5%) nearly keep pace with the 5% discount rate. The present value is about $982,500 — over 16 times salary — and with no coverage the whole amount is the gap.
55-year-old high earner close to retirement
With only 10 years left, the $86,400 annual family share is worth about $724,700 today. A $500,000 policy already covers most of it, leaving roughly $224,700 of additional need.
Frequently asked questions
What is the human life value approach to life insurance?+
It values your life insurance need as the present value of the income your dependants would lose if you died, after taxes and your own living costs. It was popularised by economist Solomon Huebner and is the economic counterpart of the "loss of earnings" figure used in wrongful-death cases.
How is human life value different from the needs approach?+
The needs approach adds up specific obligations — mortgage, debts, childcare, college, final expenses — and subtracts assets. Human life value looks only at lost earning power. Many planners compute both and buy coverage somewhere between the two figures.
What discount rate should I use?+
Use a conservative after-inflation-aware return a grieving family could realistically earn, such as 4%–6% for a balanced portfolio. A lower discount rate produces a higher human life value, so it is the more cautious choice.
Will an insurer sell me my full human life value?+
Insurers cap coverage using income multiples that fall with age — often around 20–30 times income for people in their 30s and 10–15 times in their 50s. A human life value inside those limits is usually insurable, subject to underwriting.
Should a stay-at-home parent use this calculator?+
The HLV method relies on earnings, so it understates the value of unpaid work. For a non-earning spouse, estimate the cost of replacing childcare and household services and size coverage with a needs-based calculator instead.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.