by Human Life Value (HLV) is a number that tells the present value of future income expenses, liabilities and investments. The HLV number is taken usually to understand how much money would be required to secure the lives of your dependents with term insurance, in case you are no longer around.
Importance
In life insurance, it is important to measure your economic worth. This worth can be expressed in the form of human life value. Thus, HLV is the rupee value of your economic worth in terms of what you create for the people who depend on you. So, if your life is cut short, an amount equivalent to the HLV should be available so that the people dependent on you can lead their life properly.
The Belth yearly rate of return formula:
The yearly rate of return method calculates the rate of return you’re getting annually on the savings (investment) component of your life insurance policy. The figures used in the formula are the same as those used in the Belth yearly price of protection method, although their meanings differ slightly:
i = (CV + D) + (YPT)(DB – CV)(.001) – 1 / (P + CVP)
YPT: The assumed yearly price per $1,000 of protection
P: The annual premium
D: The annual dividend
CV: The cash surrender value at the end of the year
DB: Death benefit
CVP: The cash surrender value at the end of the preceding year
I: The yearly rate of return on savings component, expressed as a decimal
