The internal rate of return in a life insurance proposal measures the profitability or loss based on premiums paid versus the benefits of the policy. The two benefits measured are accumulated cash values and/or death benefit in any one year. Almost every proposal can illustrate internal rate of return for both benefits and should be requested.
Co-Founder, Coastal Financial Partners Group, California
IRR stands for Internal Rate of Return. It is a financial measure of return on cash over time. In the context of the death benefit, the IRR is the rate at which outlays up to that year must be compounded each and every year to generate the death benefit.
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The internal rate of return in a life insurance proposal measures the profitability or loss based on premiums paid versus the benefits of the policy. The two benefits measured are accumulated cash values and/or death benefit in any one year. Almost every proposal can illustrate internal rate of return for both benefits and should be requested.