What does Human-Life Approach mean?

Human-Life approach is a procedure employed by life insurance companies, by which they calculate which is the sum a family would require being able to live, given the situation the policy holder passes away. The formula for calculating this employs several important constituents, such as the age of the policyholder, sex, financial status, health condition, plus all necessary information pertaining to the other family members.

Human-Life Approach explained

Also known as economic value of an individual life (EVOIL), the calculation basically takes into account three very important aspects: firstly, they set the value of an average income on a yearly basis, based on the policyholder’s income; secondly, they will take into calculation an estimative number of years the policyholder wishes to stay active (to work), and last they calculate the interest rate which will further help in determining the actual required sum a family needs to live on, in case the policyholder deceases.