For a unit-linked policy the insurer projects a maturity value of $60,000 from a $200 monthly premium over 15 years at 8 %. What pure savings premium would produce this value at 8 % – and what does the policy cost?
ℹ Comparison of the required pure savings premium with the actual premium.
Change any number and press "Calculate" – or use "Type in" on the right to watch it entered step by step.
The difference between the premium paid and the mathematically required savings premium reveals the ongoing costs of the policy – that is how you see what really works for you.
Here the final-value formula is solved for the rate: you divide the target by the compounding factor (qⁿ−1)/(q−1), which shows the multiple to which a rate of $1 grows. Takeaway: the longer n, the larger this factor – and the smaller the rate needed.
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