- Human life value (HLV)
- An estimate of your economic value to your household: the present value of the earnings you would bring in over your remaining working years, after removing the share you spend on yourself. Insurers and planners use it as one upper-bound reference for life insurance. It measures lost income, not the worth of a person.
- Present value
- What a stream of future money is worth in today’s dollars, found by discounting each future amount at the discount rate. A payment of $10,000 due in 10 years is worth about $6,139 today at 5%. This calculator discounts each year’s projected net earnings and adds them up to get the human life value.
- Discount rate
- The annual rate used to convert future earnings into today’s dollars, often set near the return on a safe investment. A higher discount rate makes future income worth less today and lowers the result; a lower rate raises it. When the discount rate equals the income growth rate, growth and discounting roughly cancel out.
- Self-consumption
- The share of your income spent on your own needs — food, clothing, transportation, personal costs — that your family would not have to replace if you died. This calculator removes it before projecting earnings, so at 30% self-consumption only 70% of income counts. Estimates vary with household size and spending habits.
- Income growth rate
- The yearly rate at which you expect your income to rise from raises, promotions and inflation. This calculator increases net income by this rate each year before discounting. Over a long career even a small difference matters: at 3% growth, income roughly doubles in 24 years.
- Net annual income
- Your gross annual income minus the self-consumption share — the portion that supports the rest of your household. The Year 1 figure shown is this amount before any growth. Note that this calculator does not subtract income taxes, so the result reflects pre-tax earnings net only of your personal spending.
- Working years
- The number of years you expect to keep earning, from now until retirement. It is the length of the income stream being valued, so it usually has the largest effect on the result. Retiring earlier, or a gap in employment, shortens the stream and reduces the human life value.
- Total future net earnings
- The simple sum of all projected net earnings over your working years, including growth but before discounting. It is always larger than the human life value when the discount rate is positive. The gap between the two shows how much the timing of future income reduces its value today.