TheHuman Life Value (HLV) Approachis a method used in Pennsylvania Life Insurance planning to estimate the amount of life insurance coverage needed based on the insured’sfuture earning capacity. Under this approach, the recommended coverage is calculated by multiplying the individual’s annual income by the number of working years remaining until retirement.
In this scenario, the primary income earner earns $100,000 annually and has 20 years remaining until retirement. Using the Human Life Value formula:
$100,000 × 20 =$2,000,000
Pennsylvania-approved insurance study materials emphasize that this method does not account for inflation, expenses, or investment returns unless specifically adjusted. It provides a straightforward estimate of income replacement needed for dependents.
The other answer choices do not reflect the correct calculation based on the given information. Therefore,$2,000,000is the correct and verified answer according to Pennsylvania Life, Accident, and Health Insurance documentation.
