Your return can be calculated one of two ways: as an overall return, or as an annual rate of return (APR). Until a policy matures you cannot know your APR. This is why we prefer to show clients their estimated overall return. Before marketing a policy, we typically fix the overall return according to how many months the insured is expected to live.
Example:
An 80 year old male is expected to live 5 years - 60 months. We would show an estimated overall return of 60%. In this case, if an investor had $10,000 invested in this policy, they would receive $16,000* when the policy matures. Once the policy matures the investor can figure out exactly their annual rate of return (APR). The sooner the policy matures the higher the APR; the longer it takes to mature the lower the APR.
*Life expectancy estimates are not 100% accurate and there’s no guarantee the insured will pass away on an exact date. Investors must realize there is a possibility some or all of their policies could go past life expectancy, thus lowering their overall return.