Human Life Value Approach to Calculating an Insurance Need
Assumptions:
Age at Time of Insurance Purchase: 30
Initial Income: $27,000.00
Number of Years of Working Life: 40
Assume that Income Increases: 3.50% each year
Discount Rate of Interest [Int.] = 5.00%
Discount Factor Present Value
Age Duration Income at Rate Int. Future Income
30 1 $30,000.00 0.952380952381 $28,571.43
31 2 $31,050.00 0.907029478458 $28,163.27
32 3 $32,136.75 0.8638375985315 $27,760.93
33 4 $33,261.54 0.8227024747919 $27,364.35
34 5 $34,425.69 0.7835261664685 $26,973.43
35 6 $35,630.59 0.7462153966366 $26,588.09
36 7 $36,877.66 0.7106813301301 $26,208.26
37 8 $38,168.38 0.6768393620287 $25,833.86
38 9 $39,504.27 0.6446089162178 $25,464.81
39 10 $40,886.92 0.6139132535408 $25,101.02
40 11 $42,317.96 0.5846792890864 $24,742.44
41 12 $43,799.09 0.5568374181776 $24,388.97
42 13 $45,332.06 0.5303213506453 $24,040.56
43 14 $46,918.68 0.5050679529955 $23,697.12
44 15 $48,560.84 0.481017098091 $23,358.59
45 16 $50,260.46 0.4581115219914 $23,024.90
46 17 $52,019.58 0.4362966876109 $22,695.97
47 18 $53,840.27 0.4155206548675 $22,371.74
48 19 $55,724.68 0.3957339570167 $22,052.15
49 20 $57,675.04 0.376889482873 $21,737.12
50 21 $59,693.67 0.358942364641 $21,426.59
51 22 $61,782.94 0.3418498710866 $21,120.49
52 23 $63,945.35 0.3255713057968 $20,818.77
53 24 $66,183.43 0.3100679102826 $20,521.36
54 25 $68,499.85 0.2953027716978 $20,228.20
55 26 $70,897.35 0.2812407349502 $19,939.22
56 27 $73,378.76 0.2678483190002 $19,654.38
57 28 $75,947.01 0.2550936371431 $19,373.60
58 29 $78,605.16 0.2429463210887 $19,096.83
59 30 $81,356.34 0.2313774486559 $18,824.02
60 31 $84,203.81 0.2203594749103 $18,555.11
61 32 $87,150.94 0.2098661665813 $18,290.03
62 33 $90,201.23 0.1998725396012 $18,028.75
63 34 $93,358.27 0.1903547996202 $17,771.19
64 35 $96,625.81 0.1812902853526 $17,517.32
65 36 $100,007.71 0.1726574146215 $17,267.07
Current Life Insurance Need: $808,571.95
