Whole life education
Policy loan interest calculator
See how interest accumulates on a hypothetical loan. This calculator compares paying interest each year with adding it to the balance. It does not estimate insurance returns, borrowing capacity or suitability.
What the calculation assumes
The rate stays fixed, the starting principal does not change, there are no fees and interest is calculated once per year. In the first case, interest is paid in cash each year and principal remains outstanding. In the second, no payments are made and interest is added annually. Your actual contract may calculate interest differently.
The arithmetic
With annual interest payments, total interest is principal × annual rate × years. With annual capitalization, the balance is principal × (1 + annual rate)years. The interest portion is that balance minus the original principal. Neither case includes policy growth, dividend effects, taxes, repayments of principal or fees.
Use it as a question, not a quote
Compare the result with the rate and payment terms in your insurer’s documents. If the calculation differs, ask which timing, rate or policy assumption explains the gap. A favorable hypothetical result does not establish that borrowing is appropriate or that an investment funded with the loan can repay it.
Calculations run in your browser. The amounts entered here are not submitted to the education assistant or inquiry service.
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