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.
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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