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Policy Pricing Calculator

Despite a confusing variety of products and terms, insurance pricing is always based on three components:

  • Claims paid for death benefits, or Cost of Insurance (COI)
  • Expenses associated with policy design and administration (E)
  • Investment earnings (i%)

In other words, premiums are always based on this formula:

Premiums = COI + E - i%

The Policy Pricing Calculator  uses this formula to calculate example premiums, premium loads, cost of insurance charges, policy administration expenses, cash-value-based "wrap-fees", cash values, and death benefits for a hypothetical policy based on Veralytic benchmarks, and to demonstrate how different pricing assumptions impact premium prices and policy performance. Veralytic benchmarks are derived from industry standard mortality tables (see Society of Actuaries 75-80 Basic Select & Ultimate Gender Distinct Mortality Tables at, industry aggregate expense ratios (see Society of Actuaries Generally Recognized Expense Table for 2001 also at, generally accepted actuarial principals, and an assumed policy earnings rate of your choosing. The hypothetical policy values produced by the Policy Pricing Calculator do not reflect an actual product for sale, nor do they reflect the mathematical average of all products, but instead illustrate example policy pricing and performance intended as representative of an “average product”.

Click Here to use the Policy Pricing Calculator.


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