Human Life Value, often abbreviated HLV, is a method used to estimate how much life insurance cover a person actually needs, based on a more thoughtful calculation than a simple rule of thumb. It generally considers your current income, expected future income growth, your regular expenses, outstanding loans, and the number of years remaining until your planned retirement.
The idea behind HLV is to estimate the total economic value you'd have contributed to your family over your remaining working years, which is roughly what your family would lose financially if you weren't there to earn — and that's the amount your life insurance sum assured should ideally aim to replace. While simpler thumb rules (like 10-15 times annual income) are easier to apply, an HLV-based calculation gives a more personalised and often more accurate estimate of your true insurance need.