Human Life Value

My last post stated, "Buy as much term insurance as the insurance company will sell to you!" This will approximate your HUMAN LIFE VALUE....and no, I'm not joking!

Today, I'll answer these burning questions:

• "What is Human Life Value?"
• "Why Human Life Value?"
• "Isn't it expensive to have that much insurance?"

WHAT? - Human Life Value is the economic value you create for your loved ones while you remain on the planet. It is generally calculated by estimating your total earnings during your working years and determining a lump sum of money, that if invested today, would replace those earnings. Other factors like family size, estate taxes or special needs children can and do come into play to increase the need beyond human life value. However, to keep things simple, I'm going to stick to general needs.

WHY? - I feel a metaphor coming on here...Lets imagine that the government has legislated cloning. Each citizen may, at their own expense have one and only one clone created. Let's further image that you have gone through the expense of being cloned. This is no ordinary clone. This clone has your body, your mind and your memories and so you are able to send the clone into the world to create additional income for you and your family. A few years later, your clone is invited to a foursome at the country club and a freak accident on the golf course takes out your clone. By law you must now take care of the funeral expenses. (You can fill in your own details on the freak accident, this is a metaphor; remember?) OK, how much of the clone's income would you want the clone insured for? Did you answer, "All of it!"? If not, what are you going to do away with in your present life style?

EXPENSIVE? - How about an example: Bob's a big guy, (yes he's a little overweight) His wife Janet works outside the home and he has 2.5 children...ok, he has 2 children...just testing to see if you were paying attention. He is 40 years old and is making $50,000/yr. Bob's human life value is approximately $1,000,000.

Now this is where price is greatly affected by Bob's current health so we'll look at a range of prices for a 10 year term policy:

• Standard Non-smoker $62.75/mo.
• Standard Plus Non-Smoker $51.18/mo.
• Preferred Non-Smoker $39.61/mo.

Remember Bob is "a little overweight" so I'm ignoring Super Preferred Non-Smoker $29.26/mo. Tell me, would you insure the clone for the $Million, or for two dollars a day; what are you and your family going to do without?

Put me to the test and you'll see how inexpensive insuring your Human Life Value is at your age!

Coming soon: "Getting an accurate term insurance quote on the internet! or "How to avoid the annoyance of a rate-up!"

Like me, because you are building your financial future, you naturally want to know it is secure. Begin your insurance journey by framing your security on a foundation of term life insurance. You can get started by visiting my website www.jamesrichard.com