HUMAN LIFE VALUE CONCEPT

A REVOLUTIONARY APPROACH
PROPOUNDED BY PROF. S.S.
HUEBNER WHICH HAS BROUGHT
ABOUT A NEW ECONOMIC
PHILOSOPHY OF LIFE INSURANCE.
 HUMAN NEEDS
PEOPLE WORK TO SATISFY THEIR NEEDS LIKE
* PHYSIOLOGICAL NEEDS : ROTI, KAPADA, MAKAN -
FOOD, CLOTHING AND SHELTER ( BASIC NEEDS )
* SOCIOLOGICAL NEEDS
* SECURITY NEEDS
* EGO NEEDS
* PSYCHOLOGICAL NEEDS
* ACHIEVEMENT NEEDS
HUMAN NEEDS …...
ASSET ORDER OF INSURED
IMPORTANCE
FACTORY/OFFICE 4 YES
MACHINERY 5 YES
COMPANY CARS 6 YES
KEY PEOPLE 1 NO
PROFIT/TURNOVER 2 NO
VALUE OF BUSINESS 3 NO
THERE ARE PEOPLE WHO KNOW THE PRICE OF
EVERYTHING BUT VALUE OF NOTHING.

DO YOU KNOW THE VALUE OF YOUR LIFE ??

MR AMIT IS HAVING LIFE INSURANCE OF RS. 5 LACS
AND SAYS THAT HE IS ADEQUATELY INSURED !!

THERE IS A SCIENTIFIC METHOD TO CALCULATE YOUR

WORTH …. MATHEMATICALLY IT CAN BE VERIFIED ….. IT
IS HUMAN LIFE VALUE CONCEPT ….

JUST SPARE YOUR FEW SECONDS AND

KNOW THE WORTH OF YOUR LIFE !!
A JOURNEY OF LIFE
■ WHEN A CHILD IS
BORN A NEW LIFE
BEGINS
■ AS HE/SHE GROWS
THE CHILD
ACQUIRES
- EDUCATION
- CHARACTER
- AMBITION
- EXPERIENCE
 IN SHORT HE /SHE ACQUIRES
KNOWLEDGE AND SKILL TO EARN

THIS EARNING POWER

ENABLES HIM/HER TO
SATISFY HIS/HER
PRESENT AND FUTURE NEEDS
 IT IS THIS EARNING CAPACITY WHICH IS DEFINED AS THE
HUMAN LIFE VALUE
THIS EARNING POWER IS INSURED AND NOT HIS /HER LIFE.

HUMAN LIFE VALUE IS THE ECONOMIC

INTERPRETATION OF LIFE INSURANCE.
TYPES OF CAPITAL :
(1) HUMAN CAPITAL
(2) MATERIAL CAPITAL
TYPES OF ECONOMIC VALUES :
(1) LIFE VALUES
(2) PROPERTY VALUES
AT ANY TIME, THE HUMAN LIFE VALUE IN SOCIETY IS
FAR GREATER IN MAGNITUDE THAN THE VALUE OF
ALL PROPERTY PUT TOGETHER. THE LIFE VALUES ARE
THE CAUSES AND CREATORS OF PROPERTY VALUES.
 THE CONCEPT OF HUMAN LIFE VALUE

IS BASED ON THE FACT THAT

EVERY PERSON WHO EARNS MORE
THAN NECESSARY FOR HIS/HER
SELF-MAINTENANCE HAS
A MONETARY VALUE TO THOSE WHO ARE
DEPENDENT UPON HIM.
 HUMAN LIFE VALUE IS THUS
CAPITALISED VALUE OF THAT PART
OF THE EARNING OF THE PERSON
DEVOTED TO SUPPORT FAMILY
DEPENDENTS,
BUSINESS ASSOCIATES
AND OTHERS WHO
BENEFIT FROM THIS ECONOMIC
CAPACITY.
THE CONCEPT OF LIFE INSURANCE
INVOLVES
THE ACTIVE LIFE SPAN OF A MAN
THE PROJECTED EARNING OF MAN
THE PROJECTED PERSONAL
EXPENDITURE OF AN INDIVIDUAL
THE ECONOMIC VALUE OF AN INDIVIDUAL
TO HIS DEPENDENT IN TERMS OF LIFE
INSURANCE CAN BE ESTIMATED ACCURATELY

1. ESTIMATE INDIVIDUALS AVERAGE ANNUAL

EARNING FROM FUTURE PERSONAL EFFORTS

2. DEDUCT INCOME TAX, INSURANCE PREMIUM

PERSONAL EXPENSES, COST OF SELF MAINTENANACE

3. PROBABLE PRODUCTIVE WORKING PERIOD

4. PRESENT VALUE OF FUTURE INCOME , CONSIDERING

RATE OF INFLATION.
HUMAN LIFE VALUE – WITH ANALYSIS
EXAMPLE
NAME : MR AMIT
DATE OF BIRTH : 03-09-1963
PRESENT AGE : 40 YEARS
RETIREMENT AGE : 58 YEARS
PRESENT INCOME : RS. 4,00,000 YEARLY
ANNUAL TAX : RS. 90,000
EXPENSES ON SELF : 60,000
ESTIMATED RATE OF INFLATION : 4 %
ESTIMATED RATE OF INTEREST ( TAX FREE) : 7.5 %
 PRESUMING THE GROWTH RATE OF 5 % OVER A PERIODOF 20 YEARS
GENERATION OF WEALTH WILL BE AS FOLLOW

YEAR ANNUAL INCOME TAXES EXPENSESON SELF NET-WEALTH

2003 4,00,000 90,000 60,000 2,50,000

2004 4,20,000 94,500 62,400 2,63,100
AND LIKE-WISE IT GOES ON FOR 20 YEARS
2022 10,10,780 2,27,426 1,26,411 6,55,944

TOTAL NET WEALTH : RS. 84,63,761

IN THE UNFORTUNATE EVENT OF DEATH, FAMILY IS

DEPRIVED OF THE WEALTH THAT YOU WOULD HAVE
GENERATED OTHERWISE. HENCE THERE IS A NEED TO
SAFEGUARD THIS POTENTIAL WEALTH. AN INSURANCE OF
RS. 41,11,500 IS RECOMMENDED TO ENSURE THE SAME FLOW
OF WEALTH AS SHOWN ABOVE.
HUMAN LIFE VALUE – WEALTH ANALYSIS
NAME : MR AMIT AGE : 40 YEARS
RETIREMENT AGE : 58 YEARS
ESTIMATED RTE OF INFLATION : 4 %
ESTIMATED RATE OF INTEREST ( TAX-FREE ) :. 7.5 %
PERIOD : 20 YEARS GROWTH RATE : 5 %

YEARLY INCOME TAXES EXPENSES ON SELF

4,00,000 90,000 60,000

5,00,000 1,20,000 80,000
6,00,000 1,50,000 1,00,000
7,00,000 1,80,000 1,00,000
8,00,000 1,90,000 1,00,000
HUMAN LIFE VALUE :WEALTH ANALYSIS

YEARLY INCOME TOTAL NET WEALTH INSURANCE REQUIRED

4,00,000 84,63,761 41,11,500

5,00,000 1,01,82,816 49,44,000

6,00,000 1,19,01,871 57,76,500

7,00,000 1,42,16,488 69,06,300

8,00,000 1,71,92,424 83,59,100

NO INSURANCE CONTRACT CAN INDEMNIFY
THE LOSS OF HUMAN LIFE ……

THE TEARS THAT CAN’T STOP

CAN ATLEAST BE WIPED
INSURE AND BE SECURE.
THANK-YOU