Card 2 . Human Capital Math. Premium Ledger. 2.6x The Cover For Rs 55 A Day.

RupeeCase

Education . Term Insurance Math . 2 of 3

The human capital ledger

35M . Rs 25L income . 25Y runway

Present value of the earnings the family loses if you do not come home. Salary growth 8 pct. Discount 7 pct. Twenty five years. The number the brochure does not print.

Human capital formula

PV = Annual income x [ 1 minus ( (1 + g) / (1 + d) )^n ] / ( d minus g )
PV = 25L x 26.0 = Rs 6.5 cr . where g = 0.08 . d = 0.07 . n = 25

Sum assured option	Annual premium	Daily cost	Pct of income
Rs 2.5 cr cover10x income . shelf rule	Rs 18000	Rs 49	0.72 pct
Rs 6.5 cr coverHuman capital . real number	Rs 38000	Rs 104	1.52 pct
DifferentialThe cost of 2.6x more cover	Rs 20000	Rs 55	0.80 pp

The part that breaks the brain

Rs 55 a day buys 2.6x the rupees the family actually sees. Two filter coffees. The cheapest financial product money can buy. And the one most households under-buy because the brochure prints a multiple and the math prints the number.