Human Life Value (HLV) Life Insurance Calculator

Human Life Value (HLV) is the actuarial method insurers use to underwrite large life policies. It calculates the present value of your future earnings net of self-consumption and taxes — the actual economic loss to your family if you die today. Most US carriers use HLV to cap maximum coverage at roughly 25-30x annual earned income for ages 18-40.

The HLV Formula

HLV = sum across remaining working years of: (after-tax income × (1 - self-consumption %)) × (1 + salary growth)^year, all discounted back at a real discount rate (typically 3-5%). For a 35-year-old earning $120,000 with 30 years to retirement, 25% tax rate, 30% self-consumption, 3% salary growth, 4% discount rate — HLV typically lands around $1.5M-$2.0M. Insurers use HLV as the upper bound for issuing coverage so a policy doesn't create a moral hazard.

When HLV Matters Most

HLV matters most for high earners applying for $2M+ term life. Above $5M coverage, US carriers require financial justification: tax returns, net worth statement, business valuation if self-employed. Coverage above $10M often must be split across two or three carriers because of per-life retention limits. For dual-income couples, calculate HLV separately for each spouse — both lives have economic value, not just the higher earner. Stay-at-home spouses also have HLV based on the replacement cost of childcare, household management, and estimated returning-to-work income.

Last updated May 2026. Sources: NAIC Life Insurance Underwriting Standards.