ABSTRACT
Human capital is the present value of prospective future earnings. For many people, particularly young people, human capital is their most valuable asset. It is an asset that can be enhanced by undertaking education and training. It is an asset that can be reduced by illness, and lost through death. Insurance policies can be taken out to protect against the effects of illness on earning power (often known as Permanent Health Insurance). Insurance policies can protect a person’s dependants against the financial effects of the person’s death; this is life assurance. Human capital combined with insurance is much less risky than human capital alone.
