Calculator inputs
Example data table
Sample scenario to illustrate typical inputs and outputs.
| Scenario | Premium / Year | Crediting | Total Charges / Year | Year 10 Cash Value | Year 10 Net Surrender |
|---|---|---|---|---|---|
| Baseline | $2,400 | 6.0% | $900 | $26,500 | $24,500 |
| Higher fees | $2,400 | 6.0% | $1,250 | $22,800 | $21,300 |
| Lower crediting | $2,400 | 4.5% | $900 | $23,900 | $22,100 |
Formula used
How to use this calculator
- Enter your current cash value, premium, frequency, and how long you plan to pay.
- Add your best estimates for crediting rate, policy fees, and COI growth.
- If you have loans or planned withdrawals, include them to see net proceeds.
- Press Calculate policy value to view results above the form.
- Download a CSV for spreadsheets or a PDF for documentation.
Key inputs that drive cash value
Cash value grows from net premiums plus credited interest. In an example with $200 paid monthly ($2,400 yearly) for 20 years and a 6.0% crediting rate, gross deposits total $48,000. If a 5.0% premium load applies, only $45,600 enters the account.
How charges can change long‑term results
Charges are often a mix of flat fees and percentage fees. Suppose the annual policy fee is $120, asset fee is 0.75%, and first‑year cost of insurance (COI) is $300 rising 6% yearly. By year 20, COI becomes about $962. Total charges over 20 years can exceed $12,000 in this scenario.
Understanding loans, withdrawals, and net proceeds
Loans accrue interest and reduce net proceeds at surrender. A $10,000 loan at 5.5% becomes about $17,090 after 10 years without repayment. If you also withdraw $500 yearly, the account value and taxable gain may both drop, but net surrender value may still fall.
Surrender value versus account value
Surrender value equals account value minus surrender charges and loan balance. If surrender charges start at 8% and decline to zero over 10 years, a $30,000 account value in year 3 could face a 6.4% charge, reducing value by $1,920 before loan offsets and taxes.
Using projections for reviews and comparisons
Use the projection table to compare “keep paying” versus “stop premiums,” or to test rate sensitivity. A 1.0% lower crediting rate on a $25,000 balance reduces one‑year interest by $250. Over 15 years, that gap can compound into several thousand dollars, especially when asset fees scale with balances. Review assumptions at least annually. If inflation runs 4%, a $60,000 nominal surrender value is only about $40,600 in today’s dollars after 10 years. Also test premium duration: stopping payments after year 10 cuts deposits by half, and may shift the break‑even year beyond the surrender‑charge period for better decisions.
FAQs
1) What does “policy value” mean here?
It’s the projected account or cash value after premiums, charges, and credited interest. It is not a guaranteed amount and may differ from carrier illustrations or statements.
2) Why is net surrender value lower than cash value?
Net surrender value subtracts surrender charges during the charge period and any outstanding loan balance. Those deductions can be meaningful in early years.
3) How are policy loans handled?
The calculator compounds loan interest annually and reduces net surrender value by the loan balance. If you choose repayment “from cash value,” repayments also reduce the account value.
4) What if my crediting rate changes over time?
Use multiple runs: a conservative rate, an expected rate, and an optimistic rate. Small rate changes can compound, especially when balances are larger in later years.
5) How does the inflation‑adjusted result work?
“After‑tax (real)” discounts final after‑tax proceeds by your inflation rate over the projection period. It helps compare future dollars to today’s purchasing power.
6) Are the tax estimates precise?
No. Taxes depend on policy structure, jurisdiction, and how loans or withdrawals are treated. Treat the tax section as a rough planning aid and confirm details with a qualified professional.
Disclosure: This tool provides educational estimates and does not provide legal, tax, or investment advice.