Glossary

Human life value

Also called HLV.

A method of sizing cover by valuing future earnings in today's money.

Human life value treats your future earnings as a stream of money and asks what that stream is worth today, discounted at an assumed rate, less cover already held.

The discount rate does most of the work — raise it and the answer falls sharply — which is why it should be an input you choose rather than one a calculator picks for you.

Related terms

  • Needs analysis Sizing cover from what a family would actually have to deal with, rather than from earnings alone.
  • Income multiple cap The limit on cover relative to income, which is why insurers ask what you earn.

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