Human Life Value (HLV) Calculator

How to calculate Human Life Value Calculator?

The Human Life Value (HLV) is the present value of a person’s expected future earnings, adjusted for income growth and discounted to today.

Key formula: HLV = Income × [(1 + g) / (r − g)] × [1 − ((1 + g) / (1 + r))^N] where g = income growth rate, r = discount rate, and N = remaining earning years.

Using the Human Life Value Calculator calculator: an example

Example inputs: Annual income = $80,000; growth g = 3% (0.03); discount r = 5% (0.05); term N = 30 years.

Step-by-step calculation:

1. Convert rates to decimals: g = 0.03, r = 0.05.
2. Compute the factor (1+g)/(r−g): (1.03)/(0.02) ≈ 51.5.
3. Compute the growth/discount power: ((1.03)/(1.05))^30 ≈ 0.56, so 1 − 0.56 ≈ 0.44.
4. Multiply: HLV ≈ $80,000 × 51.5 × 0.44 ≈ $1.8 million (rounded).

Frequently Asked Questions

What does Human Life Value represent?

HLV represents the economic value of future earnings a person is expected to generate over a defined period, expressed in today’s dollars.

Which discount rate should I use?

Choose a conservative after-tax discount rate that reflects investment returns and inflation expectations; commonly used values range from 3% to 6% depending on personal circumstances.

Can I include non-salary income in the calculation?

Yes. Include consistent sources of future earnings such as bonuses, freelance income, or business profits, using a reasonable annual estimate for each.