Human Life Value: the number your family needs to know
There is a concept in insurance that sounds cold when you first hear it. Human Life Value — HLV. It assigns a rupee figure to what your family would lose, financially, if you were not here.
It sounds clinical. But it is one of the most caring calculations a family can do.
HLV is not about what you are worth as a person. It is about what your earning capacity is worth to the people who depend on it. A thirty-five-year-old professional earning fifteen lakhs a year, with twenty-five working years ahead, has an HLV that runs into crores — even after adjusting for inflation, taxes, and personal consumption. That number is the gap your family would face. It is the gap insurance is supposed to fill.
Most Indian families are dramatically underinsured relative to their HLV. A family where the primary earner has an HLV of three crores often holds insurance cover of twenty to thirty lakhs — less than ten percent of the need. The policies were taken for tax-saving, or because someone sold them, or because a round number felt adequate at the time. Nobody calculated the actual requirement.
The HLV calculation is straightforward. Take your annual income. Subtract what you spend on yourself (roughly 30–40% for most individuals). Multiply the remainder by the number of working years left. Adjust for inflation and discount for present value. The resulting number is your family's financial dependence on your life.
At Dhansanchay, we calculate HLV during the first review. It is usually the conversation that changes everything — because the number is almost always larger than anyone expected, and the existing cover is almost always smaller than anyone assumed.
My father has done this calculation — in simpler, more intuitive ways — for families in Tinsukia for fifty-one years. The method has become more precise. The principle has not changed: know the number, cover the number, then build wealth on top of the cover. Never the other way around.
The families who compound quietly tend to protect the plan from both fear and euphoria. This is perspective, not a personalised recommendation. Decisions belong in conversation with someone who knows your full picture.