Calculate the ideal life insurance sum assured based on your income, expenses, age, and dependants using the scientifically accepted HLV method.
The Human Life Value (HLV) calculator helps you determine the ideal life insurance sum assured — the exact amount your family would need to maintain their current lifestyle if you were no longer around. It is based on the present value of your future earning capacity, making it far more accurate than simple thumb rules like "10 times income."
HLV considers your current income, personal expenses, years remaining until retirement, and outstanding financial liabilities to arrive at a precise coverage recommendation. It is the method recommended by IRDAI (Insurance Regulatory and Development Authority of India) for calculating adequate life cover.
The calculator uses the following steps:
The discount rate (default 6%) reflects the rate at which future income is discounted to present value — essentially the safe investment return your family could earn on the payout.
HLV = (Annual Income – Personal Expenses) × [1 – (1 + r)–n] / r
Where:
The formula discounts future annual contributions to today's value, giving you the lump sum your family would need invested today to replicate your income stream until retirement.
Human Life Value (HLV) is the present value of all future income that a person is expected to earn until retirement, minus personal expenses. It represents the financial loss their family would suffer upon their death. HLV is the most scientifically accepted method to calculate the ideal life insurance sum assured.
HLV is calculated as: (Annual Income – Personal Expenses) × Present Value Annuity Factor based on remaining working years and expected return rate. The result is the lump sum your family needs today to replace your future earnings. Our calculator uses a 6% discount rate as a conservative standard.
As a thumb rule, your cover should be 10–15 times your annual income. However, the HLV method gives a more precise figure by factoring in your age, remaining working years, expenses, existing cover, and liabilities. Always include outstanding loans and children's future expenses in the calculation.
The income replacement method simply multiplies annual income by a fixed factor (e.g., 10x or 15x). HLV is more precise — it discounts future income streams to present value, accounts for personal expenses, and factors in your exact retirement age. HLV gives a more accurate and personalised cover recommendation.
Yes. Your required additional cover = HLV – existing life cover – liquid assets. If your HLV is ₹2 crore and you already have ₹50 lakh cover, you need at least ₹1.5 crore more. Always subtract current cover to avoid over-insuring and paying unnecessary premiums.
Outstanding loans (home loan, personal loan, car loan) should be added on top of the HLV amount, since your family would need to repay them from the insurance payout. Enter your total outstanding liabilities in the calculator to get the complete cover requirement including debt clearance.
The earlier the better. A 25-year-old pays roughly ₹600–₹800/month for ₹1 crore cover; the same cover at 40 costs ₹2,000–₹3,000/month. Buy term insurance as soon as you have financial dependants or outstanding liabilities. The premium is locked at purchase age for the entire policy term.
A 6% discount rate is the standard conservative assumption for HLV in India, approximating long-term inflation-adjusted safe returns. Some advisors use 5–7% depending on the investment environment. Our calculator defaults to 6% which is suitable for most planning scenarios.
Yes. A homemaker's HLV is estimated by calculating the cost of replacing all services they provide — childcare, cooking, household management, elder care. IRDAI recommends a minimum cover of ₹20–₹50 lakh for non-earning spouses depending on the family's financial situation.
Review your cover at every major life event: marriage, childbirth, home purchase, salary increase, or taking a new loan. As a minimum, review every 3 years. Your required cover typically increases when you take on new dependants or liabilities, and can reduce after children become financially independent.
