What does the human life value approach estimate?

The human life value approach estimates a person's earning potential, which is crucial in determining the amount of life insurance coverage an individual may need. This method emphasizes the economic value an individual contributes to their dependents over their working life, considering factors such as salary, work-related benefits, and productivity. By calculating this value, the approach helps insurance professionals offer policies that adequately replace income in the event of the individual's untimely death, ensuring that dependents can maintain their standard of living.

In this context, evaluating current assets, insurance premium rates, or health risks does not align with the human life value approach, as it specifically focuses on future earning capacity rather than current financial standing or health assessments.