It’s one of the most common questions people type into Google, ask ChatGPT, and search on YouTube. Richard Canfield breaks down the concept that insurance companies actually use to answer it: human life value.
What is human life value?
According to Richard, it’s “the economic value associated with your life based on the people that depend on you.” Insurance companies don’t know your family’s full story; what they know is your income and your age, and that’s largely what determines the number they land on. As Richard puts it, “your family doesn’t love you because of your income. They love you because of you,” but insurance companies still have to deal with the financial reality of what disappears if you’re no longer there.
How do insurance companies calculate human life value?
Most use income multiples tied to age brackets. As a general guidepost (multiples vary somewhat by carrier): in your 20s, the multiple is typically around 25–30 times income; in your 30s, around 20–25 times; it decreases further through your 40s, 50s, and 60s as your remaining working years shrink. For example, a 32-year-old earning $100,000 a year might have a human life value capacity in the range of $2 million to $2.5 million using a 20–25x multiplier.
Is “10 times your income” enough life insurance?
Usually not, according to Richard, except roughly at older ages like 60, where the multiple naturally comes down closer to that range. For most people in their 20s, 30s, and 40s, 10x income falls well short of actual human life value, especially once debts, dependents, and final expenses are factored in.
What’s the biggest mistake people make when calculating how much insurance they need?
Not accounting for the “replacement income gap”: the actual capital required to replace lost income for as long as a family depends on it, not just enough to cover a mortgage, a car, or a child’s college fund. Richard notes that people often update their debt (refinancing a mortgage, consolidating debt, buying a new car) without ever revisiting their insurance to match.
Is life insurance for final expenses enough?
Richard is direct about this: “personally, just all things being equal, I just think that’s irresponsible.” Someone has to manage the entire process left behind, and minimal coverage leaves a family with far less room to actually keep living the life they had.
How can I calculate my own human life value?
Richard demonstrates a free tool, lifevalplanner.com, which walks through five steps (income, family details, existing coverage, and optional asset information) to generate a personalized estimate in under three minutes, including an AI assistant that can answer follow-up questions about your specific results.
Frequently Asked Questions
How much life insurance do I actually need? It depends on your age, income, family situation, and debts. Insurance companies typically use an income-multiple framework as a starting point, adjusted for individual circumstances.
Is 10 times my income enough life insurance? For most people under 60, no, that multiple is usually too low relative to how insurance companies actually assess human life value.
What is the “replacement income gap”? It’s the amount of capital needed to replace a lost income stream for as long as a family depends on it, a factor many people and online calculators overlook.
Does group life insurance through my employer count as sufficient coverage? Not necessarily. Employer group coverage typically disappears if you leave or lose that job, so it shouldn’t be relied on as your only protection.
Watch the full episode on