Tuesday 14 June 2011

What is Human Life Value?

In short Human life value is Invaluable.But in practical terms it is the present
value of your future earnings.
 
Human Life Value is determined by 3 factors
 
Age,Current and future expenses, Current and future Income.
 
The thumb rule is that one should save 8 to 10 times of his Annual Salary.
 
For easier understanding, If some one earns Rs 1,00,000 as an income per
month.Incase if he dies his family should have atleast 2 crore. The idea is if
they put this Rs 2 crore in a savings account and if they get 6% per annum as
returns .they get Rs 12 lakh which is 1 lakh per month, which is the income that
he was drawing when he was alive.So here 2 Crore is his Human Life Value.
 
Actually this process of evaluating the human life should be done every year as
the commitment, income ,expenses all changes every year.

2 comments:

  1. hello,
    Nice calculation on human life.I accept ur calculation. Human life only based on money. But people should think how they are running towards money earning? Even though your idea will help us to save our earnings. thanks for giving such a valuable information..

    ReplyDelete
  2. //
    vinu said...
    hello,
    Nice calculation on human life.I accept ur calculation. Human life only based on money. But people should think how they are running towards money earning? Even though your idea will help us to save our earnings. thanks for giving such a valuable information..
    //
    Vinu,Thx for your comments

    ReplyDelete

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