I have been servicing a limited pay whole life policy for 15 years. How do I compute the internal rate of return of the policy to help me with my next policy selection?

Hi there,

If you are looking to calculate the IRR, you can actually look at the bottom of the page of the policy illustrations, with the surrender value. It is required by all insurers to list the IRR of the policy over there.

Do take note that the IRR stated, is with relation to the end of your policy term. If you are looking for a specific point which you will surrender the policy, you can use a financial calculator, and calculate the total amount paid, corresponding with the value at surrender.

In my opinion, the IRR is more useful for an endowment policy as there will be a point which the policy will mature. In most cases with a limited pay life policy, you will not realise the value of the policy as it is paid up, and it gives better returns on death.

I do hope i was able to address your queries!