How do I calculate the cash value of my life insurance policy?

For a policy you own, the current cash value is printed on your annual statement or in the insurer’s online account; this calculator projects it forward. The math is the same for every permanent policy: cash value = last year’s value + premium − expense charges − cost of insurance, then credited with interest or dividends. For a new $100,000 whole life policy bought at 35 (about $1,036/yr), that gives roughly $3,126 after 5 years, $8,730 after 10 and $25,908 after 20 at a 6% dividend rate.

How much cash value does a whole life policy have after 10, 20 or 30 years?

On the calculator’s typical $100,000 whole life policy (male, 35, preferred health, $1,036/yr, 6% dividend rate) the cash value is $8,730 after 10 years (84% of premiums paid), $25,908 after 20 years (125%) and $54,679 after 30 years (176%). At a guaranteed-style 3.5% rate the 30-year figure would be about $33,964.

What is the cash value of a $100,000 whole life policy?

It depends on age at purchase and how long you have paid. Bought at 35, a $100,000 policy (about $1,036/yr for a man) holds about $8,730 after 10 years and $25,908 after 20. Bought at 55 (about $2,330/yr), it holds about $16,904 after 10 years and $48,710 after 20. Cash value climbs toward the full $100,000 at age 121, when the policy matures.

What is the cash value of a $25,000 20-pay whole life policy after 20 years?

About $12,491 on the calculator’s model for a man who buys at 35 and pays about $437 a year for 20 years ($8,749 total), or about $9,519 on guaranteed-style values. The policy is then paid up: no more premiums, and the cash value keeps growing. A 10-pay version costs about $805/yr and reaches $13,971 by year 20; paying premiums for life costs about $259/yr but has only $6,477 at year 20.

What is the cash value of a $100,000 whole life policy paying $565 a month?

$565 a month ($6,780/yr) is several times the usual premium for $100,000 of whole life, so most of it builds cash value. Bought at 45, the calculator projects $70,294 after 10 years and $215,582 after 20 ($135,600 paid), breaking even in year 10. A premium that large would very likely fail the IRS 7-pay test and make the policy a modified endowment contract (MEC), so withdrawals and loans would be taxed gain-first.

What percentage of whole life premiums goes to cash value?

Very little at first and more every year. In the calculator’s typical policy the cash value equals about 29% of premiums paid after year 2, 60% after year 5, 84% after year 10 and 125% after year 20, because the first-year premium mostly pays commissions, underwriting and issue costs. A paid-up additions (PUA) rider raises the early percentages because the PUA portion carries a much smaller charge.

When does a whole life policy break even?

Usually somewhere between years 12 and 18 (Policygenius), meaning cash value finally equals total premiums paid. The calculator’s typical policy bought at 35 breaks even in year 14; bought at 55 it takes about 19 years. Heavily funded policies with a large paid-up additions rider can break even years sooner, while surrendering before break-even returns less than you paid.

Does term life insurance have a cash value? What does a 20-year term policy pay out?

No. Term life is pure protection: it pays the death benefit if the insured dies during the term and nothing if you outlive it or cancel, so a 20-year term policy has no cash value at the end. The NAIC buyer’s guide notes most term policies never build cash value. The exception is return-of-premium term, which refunds the premiums (not interest) if you outlive the term, and convertible term, which can be swapped for a cash value policy.

How do you calculate the net cash surrender value?

Net cash surrender value = cash value + cash value of paid-up additions + dividend accumulations + any terminal dividend + advance premiums − surrender charges − outstanding loans and interest. The textbook example: $2,000 cash value + $100 paid-up additions + $125 dividend accumulations + $250 advance premiums − $500 loan = $1,975.00. The second tab of the calculator does this sum for your statement.

How much tax do I pay if I surrender my life insurance policy?

Only on the gain. IRS Publication 525 says you include in income the proceeds above your cost: premiums paid minus refunded premiums, rebates, dividends and unrepaid loans not already taxed. The gain is ordinary income, reported on Form 1099-R. Example: a statement showing $24,730 cash value, $23,737.10 of paid-up additions and a $1,711.50 terminal dividend surrenders for $50,178.60; with $40,000 of premiums paid, $10,178.60 is taxable.

Are paid-up additions and dividends taxable?

Not while they stay inside the policy. IRS Publication 550 treats dividends as a partial return of premium that is not taxed until total dividends exceed the net premiums paid, and dividends used to pay premiums are not taxable. The interest credited on dividends left on deposit is taxable each year. Paid-up additions are taxed only as part of the gain if you surrender.

How much can I borrow against my life insurance cash value?

Insurers typically lend up to about 90% of the cash surrender value, with no credit check, and the loan does not have to be repaid on a schedule. Interest still accrues: under the NAIC model law a policy can charge a fixed rate of up to 8% or a variable rate tied to Moody’s corporate bond yield average, which was 5.96% in July 2026. Unpaid loans and interest are deducted from the death benefit.

What happens if I never pay back a life insurance loan?

The balance compounds. In the calculator’s example, a $20,000 loan at 6% on a $50,000 policy credited at 4% grows to $114,870 in 30 years while the cash value reaches $162,170, leaving a $135,130 death benefit. Borrow $40,000 at 8% instead and the loan overtakes the cash value in year 6, when the policy lapses; the loan amount above your cost basis then becomes taxable income even though you receive no cash.

How is universal life cash value calculated?

Each month the insurer adds your premium (minus a premium load), deducts a cost-of-insurance charge (death rate at your age × the amount at risk) and administrative fees, then credits interest. Charges rise every year with age, so an underfunded UL policy can run dry. Example: a 76-year-old with $141,024.21 of cash value paying $700 a month into a $300,000 UL policy credited at 3% would have about $206,229 after 15 years (age 91); at 1% it would have $85,784.

How does indexed universal life (IUL) cash value grow?

IUL credits interest based on a stock index, limited by a cap and participation rate and protected by a 0% floor, after deducting the same insurance charges as universal life. Funded with $450 a month for $500,000 at age 40, the calculator projects $133,420 after 20 years and $255,988 after 30 at a steady 5.5%, versus $165,528 at 2 points lower. Real index credits vary every year, and 0% years still carry charges.

What fees reduce variable life insurance cash value?

The SEC’s Investor.gov lists sales charges on premiums, surrender charges in the early years, mortality and expense (M&E) risk charges as a percentage of account value, cost of insurance, administrative fees, and the fund expenses of the subaccounts. Surrender charge periods in filed prospectuses commonly run 9 to 15 years. Cash value can fall when markets fall, and the policy can lapse if it drops too far.

What is a modified endowment contract (MEC) and the 7-pay test?

A policy becomes a MEC under 26 U.S.C. 7702A if the premiums paid in its first 7 years exceed what would pay it up in 7 level annual premiums. A MEC keeps the tax-free death benefit, but loans and withdrawals are taxed gain-first and a 10% additional tax usually applies before age 59½. Insurers track the limit and warn you before a payment would cause MEC status.

How is reduced paid-up insurance calculated?

The insurer uses your net cash value as a single premium for a smaller fully paid policy at your current age. Paid-up face = net cash value ÷ net single premium per dollar of coverage. For the typical policy at year 20 (age 55, $25,908 of cash value) the calculator estimates about $69,553 of lifetime coverage, or the full $100,000 as extended term insurance for about 34 years. Your policy’s nonforfeiture table gives the exact figures.

Do beneficiaries get the cash value and the death benefit?

With whole life and level-death-benefit (Option A) universal life, beneficiaries receive the death benefit only; the cash value is part of it, not paid on top. Universal life with an increasing death benefit (Option B) pays the face amount plus the cash value. Paid-up additions bought with dividends raise a whole life death benefit, and unpaid loans reduce it.

What is the difference between cash value and cash surrender value?

Cash value (also called accumulated or account value) is the total built up inside the policy. Cash surrender value is what you would actually receive if you cancel: cash value minus any surrender charge and outstanding loans, plus dividend extras on whole life. Surrender charges on universal and variable policies usually disappear after 10 to 15 years, so the two numbers converge.

What dividend rate do whole life policies pay in 2026?

MassMutual set a 6.60% dividend interest rate for 2026 and Northwestern Mutual 5.75% for most policies. The dividend interest rate is not your rate of return: it is only the investment part of the dividend formula, and the actual cash value growth after insurance and expense charges is lower. The calculator defaults to 6% for whole life; use 3–4% to approximate guaranteed values.

Is the life insurance death benefit or cash value taxable?

The death benefit is generally income-tax-free to beneficiaries under 26 U.S.C. 101(a), and cash value grows tax-deferred while the policy is in force. Tax applies when you surrender for more than your cost, when a policy with a loan lapses, or on MEC distributions. You can move cash value to another policy or annuity without tax through a Section 1035 exchange.

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Whole life · Universal · IUL · Variable

Cash Value Life Insurance Calculator

Quick answer

Cash value grows slowly at first because early premiums pay commissions and issue costs. A typical $100,000 whole life policy bought at 35 for about $1,036 a year holds about $8,730 after 10 years, $25,908 after 20 and $54,679 after 30 at a 6% dividend rate, and it breaks even around year 14. Your cash surrender value is cash value plus dividend values minus surrender charges and loans; only the amount above the premiums you paid is taxable. Term life has no cash value.

Project any whole life, universal life, indexed universal life or variable life policy year by year, including a policy you already own. Then work out the check you would get if you surrendered it, the tax on the gain, or what happens to a policy loan you never pay back.

Year-by-year cash value, surrender value, break-even and IRR
New policies or the one you own (start from your statement)
Net cash surrender value with paid-up additions, dividends and loans
Policy loan growth, lapse year and taxable income at lapse

Last updated October 2, 2026. Cost of insurance uses the SSA 2023 period life table; tax rules from IRS Publications 525 and 550. Educational estimates, not an insurer illustration or tax advice. · cash value by year · cash surrender value

Cash Value Life Insurance Calculator

Project whole life, universal, IUL or variable life cash value year by year, work out your net cash surrender value and tax, or test a policy loan.

Policy type

Dividend / growth rate (%)

2026 dividend interest rates: 5.75% (Northwestern Mutual) to 6.60% (MassMutual). Use about 3–4% for guaranteed values.

Policy status

Age at purchase

Sex

Health class

Death benefit (face amount)

Premium

Years to project

Premiums paid

Paid-up additions rider (% of premium)

Share of each premium buying paid-up additions; raises early cash value.

Cash value after 30 years (age 65)

$243,683

At 4%: $165,584

Cash surrender value

$243,683

Loan available ≈ $219,315 (90%)

Total premiums paid

$144,000

Cash value = 169% of premiums

Break-even year

Year 15

Surrender value ≥ premiums paid

Return on premiums (IRR)

3.21%

If surrendered at the end

Death benefit

$500,000

Model premium for this policy ≈ $5,179/yr

━ Cash value━ Surrender value┅ Premiums paidMax $243,683

Year	Age	Premiums paid	Cash value	Surrender value	Death benefit	CV ÷ paid
1	36	$4,800	$0	$0	$500,000	0%
3	38	$14,400	$6,024	$6,024	$500,000	42%
5	40	$24,000	$14,123	$14,123	$500,000	59%
10	45	$48,000	$39,512	$39,512	$500,000	82%
15	50	$72,000	$73,323	$73,323	$500,000	102%
20	55	$96,000	$116,767	$116,767	$500,000	122%
25	60	$120,000	$172,149	$172,149	$500,000	143%
30	65	$144,000	$243,683	$243,683	$500,000	169%

How it was calculated

Start: age 35, $500,000 whole life, $4,800/yr.
Each premium is reduced by a front-loaded expense charge (85% in year 1, 30% in year 2, 20% in year 3, 12% in years 4–5, 8% in years 6–10, 5% after).
Cost of insurance = death rate at the insured’s age (SSA 2023 life table × 0.6) × amount at risk (death benefit − cash value).
What remains grows at 6% a year.
After 30 years: cash value $243,683, surrender value $243,683, premiums paid $144,000.

Surrendering would create a taxable gain of about $99,683 (surrender value above premiums paid), taxed as ordinary income.

Whole life insurance cash value chart by year

$100,000 whole life, male, age 35, preferred health, premiums of $1,036 a year for life. Projected at a 6% dividend rate, with a 3.5% guaranteed-style column for comparison.

Policy year	Age	Premiums paid	Cash value at 6%	Cash value at 3.5%	Cash value ÷ premiums
1	36	$1,036	$1	$1	0%
2	37	$2,072	$601	$587	29%
3	38	$3,108	$1,343	$1,296	43%
5	40	$5,179	$3,126	$2,949	60%
10	45	$10,358	$8,730	$7,718	84%
15	50	$15,538	$16,220	$13,355	104%
20	55	$20,717	$25,908	$19,680	125%
25	60	$25,896	$38,380	$26,566	148%
30	65	$31,075	$54,679	$33,964	176%
40	75	$41,434	$107,392	$50,532	259%

The model breaks even in year 14, inside the 12–18 year range Policygenius reports for typical whole life. Your own illustration will differ by insurer, underwriting class and dividend option.

After 10 years

$100,000 whole life, age 35

$8,730

84% of premiums paid

Break-even

Cash value = premiums paid

Year 14

typical range years 12–18

After 30 years

Age 65

$54,679

176% of premiums paid

How life insurance cash value is calculated

Cash value (end of year) = (cash value last year + premium − expense charges − cost of insurance) × (1 + credited rate)

Cost of insurance = death rate at your age × (death benefit − cash value)

Cash surrender value = cash value + dividend values − surrender charge − loans

What the calculator assumes

Whole life expense charges of 85% of the first-year premium, 30% in year 2, 20% in year 3, 12% in years 4–5, 8% in years 6–10 and 5% after; paid-up additions carry 8%.
Universal, indexed and variable life: 6% premium load, $120 a year in policy fees and a surrender charge of 3% of face that declines to zero over 10 years.
Death rates from the SSA 2023 life table, scaled for health class: 60% preferred, 100% standard, 175% rated.
The model premium is priced at 3.5% so the policy reaches its face amount at age 121, the way guaranteed whole life values are built.

Why early cash value is so low

The first-year premium pays the agent’s commission, medical underwriting and policy issue costs. That is why cash value after year 1 is close to $0 and only about 60% of premiums after year 5.

Later, the insurance cost shrinks relative to the policy because the amount at risk (death benefit minus cash value) falls, and compounding takes over. By year 20 the typical policy holds 125% of what was paid in.

Cash value of a $100,000 whole life policy by age

Model premium (preferred health, pay for life) and projected cash value at a 6% dividend rate.

Age at purchase	Annual premium (M / F)	Cash value year 10 (M / F)	Cash value year 20 (M / F)	Break-even year (M / F)
25	$724 / $588	$6,189 / $5,671	$18,440 / $16,793	14 / 11
35	$1,036 / $858	$8,730 / $8,001	$25,908 / $23,646	14 / 12
45	$1,523 / $1,276	$12,498 / $11,458	$35,765 / $33,179	16 / 13
55	$2,330 / $1,961	$16,904 / $16,102	$48,710 / $46,617	19 / 15
65	$3,693 / $3,138	$23,475 / $23,255	$67,439 / $65,467	23 / 19

Scale linearly for other face amounts: a $30,000 policy is about 30% of these figures, a $750,000 policy about 7.5 times.

10-pay, 20-pay and paid-up-at-65 whole life: a $25,000 policy

Male, age 35, preferred health. Limited-pay policies cost more each year but build cash value faster and are paid up sooner.

Payment plan	Annual premium	Cash value year 10	Cash value year 20	Year 20 at 3.5%	Break-even
Every year (premiums to 121)	$259	$2,182	$6,477	$4,920	Year 14
20-pay	$437	$4,130	$12,491	$9,519	Year 12
10-pay	$805	$8,139	$13,971	$9,519	Year 10
Paid up at 65	$334	$3,001	$9,003	$6,852	Year 13

Whole life vs universal life vs IUL vs variable life cash value

Same buyer (male, 40, preferred), same $500,000 death benefit and same $450 a month, each projected at its default rate. The last column drops the rate by 2 points.

Policy	Rate	Surrender value yr 5	Cash value yr 10	Cash value yr 20	Cash value yr 30	Yr 30 at −2 pts
Whole life	6%	$15,352	$43,030	$123,622	$251,744	$166,948
Universal life	4%	$13,296	$48,341	$110,682	$184,560	$119,505
IUL	5.5%	$14,316	$52,687	$133,420	$255,988	$165,528
Variable life	6%	$14,665	$54,226	$142,085	$285,541	$184,560

Feature	Whole life	Universal life	Indexed UL	Variable UL
Premium	Fixed, guaranteed	Flexible	Flexible	Flexible
Cash value growth	Guaranteed rate + dividends	Declared rate, minimum guarantee	Index-linked, cap and 0% floor	Subaccount returns, can lose value
Main charges	Built into premium	Premium load, COI, fees	Premium load, COI, fees, rider costs	Sales load, COI, M&E, fund fees
Surrender charge	None (low early values instead)	Usually 10–15 years	Usually 10–15 years	Usually 9–15 years
Lapse risk	None while premiums are paid	Yes if underfunded	Yes if underfunded	Yes, also from market losses
Regulated as a security	No	No	No	Yes (SEC prospectus)

Whole life breaks even in year 16 here, universal life in year 18, IUL in year 12 and variable life in year 11. Only the whole life numbers are backed by guarantees; the others assume the rate holds every single year.

Net cash surrender value: worked example

Cash value	$2,000.00
Paid-up additions (cash value)	$100.00
Dividend accumulations	$125.00
Advance (prepaid) premiums	$250.00
Policy loan + interest	−$500.00
Net cash surrender value	$1,975.00

Loans are subtracted, but for tax purposes the loan paid off at surrender counts as money you received. Surrender charges apply mainly to universal and variable policies.

Cash value vs surrender value vs death benefit

Cash value (accumulated or account value): the savings built inside the policy.

Cash surrender value: what you get if you cancel, after surrender charges and loans.

Death benefit: what beneficiaries receive. With whole life and Option A universal life the cash value is included in it, not paid on top.

Loan value: usually up to about 90% of the cash surrender value.

Taxes on life insurance cash value

Event	Tax treatment	Rule
Cash value growth inside the policy	Not taxed while the policy stays in force	26 U.S.C. 7702
Full surrender	Proceeds (including loans paid off) minus cost basis = ordinary income	IRS Pub. 525; Form 1099-R
Withdrawal from a non-MEC	Tax-free up to the cost basis, then taxable	26 U.S.C. 72(e)
Policy loan from a non-MEC	Not taxable while the policy stays in force	26 U.S.C. 72(e)
Policy lapses with a loan	Loan above cost basis becomes taxable income	IRS Pub. 525
Loan or withdrawal from a MEC	Gain taxed first, plus 10% before age 59½	26 U.S.C. 7702A, 72(v)
Dividends	Return of premium; interest on dividends left on deposit is taxable yearly	IRS Pub. 550
Death benefit	Generally income-tax-free to beneficiaries	26 U.S.C. 101(a)
Exchange for another policy or annuity	No tax if done as a 1035 exchange	26 U.S.C. 1035

Example: an $80,000 policy with a $60,000 loan sends you a check for only $20,000, but with $50,000 of premiums paid the taxable gain is $30,000, because the $60,000 loan payoff counts as proceeds.

Borrowing against cash value

Policy loans need no credit check and have no repayment schedule. Under NAIC Model 590, the rate is either fixed at up to 8% or variable, capped by the Moody’s corporate bond average (5.96% in July 2026).

A $20,000 loan at 6% on a $50,000 policy credited at 4% grows to $114,870 in 30 years against $162,170 of cash value. A $40,000 loan at 8% would overtake the cash value in year 6 and lapse the policy.

If you stop paying: nonforfeiture options

State nonforfeiture laws protect the cash value if you stop paying; most whole life policies offer three choices:

Cash surrender: take the cash surrender value and end coverage.
Reduced paid-up: a smaller policy with no more premiums. The typical policy at year 20 (age 55) buys about $69,553.
Extended term: the full $100,000 as term coverage for a set time, about 34 years in that example.

2026 whole life dividend interest rates

Insurer	2026 dividend interest rate	Note
MassMutual	6.60%	Record $2.9 billion dividend payout announced for 2026
Northwestern Mutual	5.75%	For most policies; $9.2 billion total 2026 dividend payout

The dividend interest rate is only the investment component of the dividend, not your return: the projected 30-year return on premiums for the calculator’s default $500,000 policy at 6% is 3.21% a year.

Limits of this estimate

Insurers use their own expense, mortality and dividend scales. An in-force illustration from your insurer is the only exact projection of your policy.
Dividends, UL crediting rates, index credits and fund returns are not guaranteed; check the lower-rate result too.
The death benefit shown is the base face amount; paid-up additions bought with dividends would raise it.
Tax results are federal estimates. Get tax advice before surrendering a policy with a large gain or loan.

Sources

IRS Publication 525 — Taxable and Nontaxable IncomeSurrender proceeds above cost are taxable; cost = premiums − refunds, rebates, dividends and unrepaid loans
IRS Publication 550 — Investment Income and ExpensesPolicy dividends are a return of premium; interest on dividends left on deposit is taxable
IRS FAQ — Life insurance proceedsDeath proceeds to a beneficiary are generally not taxable income
26 U.S.C. 7702A — Modified endowment contract (Cornell LII)7-pay test and material changes
26 U.S.C. 72(e) and (v) — Distributions and the 10% additional tax (Cornell LII)Gain-first taxation of MEC loans and withdrawals
26 U.S.C. 101 — Death benefits (Cornell LII)Exclusion of life insurance death proceeds
26 U.S.C. 1035 — Tax-free policy exchanges (Cornell LII)Life insurance to life insurance or annuity exchanges
NAIC — Life Insurance Buyer’s Guide (PDF)Term vs cash value insurance, policy loans and nonforfeiture uses of cash value
NAIC — Life insurance topic pageWhole life, participating dividends, nonforfeiture values, limited-pay policies
NAIC Model Policy Loan Interest Rate Bill (Model 590, PDF)Fixed policy loan rate up to 8% or a variable rate tied to Moody’s corporate yields
NAIC — Moody’s corporate bond yield averagesAverage corporate yield 5.77% (June 2026) and 5.96% (July 2026)
Social Security Administration — 2023 period life table (2026 Trustees Report)Death probabilities by age and sex used for the cost of insurance
SEC Investor.gov — Variable life insuranceSales loads, surrender charges, M&E risk fees, cost of insurance, administrative fees
Penn Mutual Variable Life Account I prospectus (SEC EDGAR)Example surrender charge up to $42 per $1,000 of face, grading down over 9 years
MassMutual — 2026 policyowner dividend announcement6.60% dividend interest rate for 2026; not the rate of return on the policy
Northwestern Mutual — How whole life dividends are calculated5.75% dividend interest rate for most policies in 2026; worked dividend example
Policygenius — Life insurance break-evenWhole life often breaks even between years 12 and 18

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Whole life · Universal · IUL · Variable

Cash Value Life Insurance Calculator

Quick answer

Year-by-year cash value, surrender value, break-even and IRR
New policies or the one you own (start from your statement)
Net cash surrender value with paid-up additions, dividends and loans
Policy loan growth, lapse year and taxable income at lapse

Cash Value Life Insurance Calculator

Project whole life, universal, IUL or variable life cash value year by year, work out your net cash surrender value and tax, or test a policy loan.

Policy type

Dividend / growth rate (%)

2026 dividend interest rates: 5.75% (Northwestern Mutual) to 6.60% (MassMutual). Use about 3–4% for guaranteed values.

Policy status

Age at purchase

Sex

Health class

Death benefit (face amount)

Premium

Years to project

Premiums paid

Paid-up additions rider (% of premium)

Share of each premium buying paid-up additions; raises early cash value.

Cash value after 30 years (age 65)

$243,683

At 4%: $165,584

Cash surrender value

$243,683

Loan available ≈ $219,315 (90%)

Total premiums paid

$144,000

Cash value = 169% of premiums

Break-even year

Year 15

Surrender value ≥ premiums paid

Return on premiums (IRR)

3.21%

If surrendered at the end

Death benefit

$500,000

Model premium for this policy ≈ $5,179/yr

━ Cash value━ Surrender value┅ Premiums paidMax $243,683

Year	Age	Premiums paid	Cash value	Surrender value	Death benefit	CV ÷ paid
1	36	$4,800	$0	$0	$500,000	0%
3	38	$14,400	$6,024	$6,024	$500,000	42%
5	40	$24,000	$14,123	$14,123	$500,000	59%
10	45	$48,000	$39,512	$39,512	$500,000	82%
15	50	$72,000	$73,323	$73,323	$500,000	102%
20	55	$96,000	$116,767	$116,767	$500,000	122%
25	60	$120,000	$172,149	$172,149	$500,000	143%
30	65	$144,000	$243,683	$243,683	$500,000	169%

How it was calculated

Start: age 35, $500,000 whole life, $4,800/yr.
Each premium is reduced by a front-loaded expense charge (85% in year 1, 30% in year 2, 20% in year 3, 12% in years 4–5, 8% in years 6–10, 5% after).
Cost of insurance = death rate at the insured’s age (SSA 2023 life table × 0.6) × amount at risk (death benefit − cash value).
What remains grows at 6% a year.
After 30 years: cash value $243,683, surrender value $243,683, premiums paid $144,000.

Surrendering would create a taxable gain of about $99,683 (surrender value above premiums paid), taxed as ordinary income.

Whole life insurance cash value chart by year

$100,000 whole life, male, age 35, preferred health, premiums of $1,036 a year for life. Projected at a 6% dividend rate, with a 3.5% guaranteed-style column for comparison.

Policy year	Age	Premiums paid	Cash value at 6%	Cash value at 3.5%	Cash value ÷ premiums
1	36	$1,036	$1	$1	0%
2	37	$2,072	$601	$587	29%
3	38	$3,108	$1,343	$1,296	43%
5	40	$5,179	$3,126	$2,949	60%
10	45	$10,358	$8,730	$7,718	84%
15	50	$15,538	$16,220	$13,355	104%
20	55	$20,717	$25,908	$19,680	125%
25	60	$25,896	$38,380	$26,566	148%
30	65	$31,075	$54,679	$33,964	176%
40	75	$41,434	$107,392	$50,532	259%

The model breaks even in year 14, inside the 12–18 year range Policygenius reports for typical whole life. Your own illustration will differ by insurer, underwriting class and dividend option.

After 10 years

$100,000 whole life, age 35

$8,730

84% of premiums paid

Break-even

Cash value = premiums paid

Year 14

typical range years 12–18

After 30 years

Age 65

$54,679

176% of premiums paid

How life insurance cash value is calculated

Cash value (end of year) = (cash value last year + premium − expense charges − cost of insurance) × (1 + credited rate)

Cost of insurance = death rate at your age × (death benefit − cash value)

Cash surrender value = cash value + dividend values − surrender charge − loans

What the calculator assumes

Whole life expense charges of 85% of the first-year premium, 30% in year 2, 20% in year 3, 12% in years 4–5, 8% in years 6–10 and 5% after; paid-up additions carry 8%.
Universal, indexed and variable life: 6% premium load, $120 a year in policy fees and a surrender charge of 3% of face that declines to zero over 10 years.
Death rates from the SSA 2023 life table, scaled for health class: 60% preferred, 100% standard, 175% rated.
The model premium is priced at 3.5% so the policy reaches its face amount at age 121, the way guaranteed whole life values are built.

Why early cash value is so low

The first-year premium pays the agent’s commission, medical underwriting and policy issue costs. That is why cash value after year 1 is close to $0 and only about 60% of premiums after year 5.

Cash value of a $100,000 whole life policy by age

Model premium (preferred health, pay for life) and projected cash value at a 6% dividend rate.

Age at purchase	Annual premium (M / F)	Cash value year 10 (M / F)	Cash value year 20 (M / F)	Break-even year (M / F)
25	$724 / $588	$6,189 / $5,671	$18,440 / $16,793	14 / 11
35	$1,036 / $858	$8,730 / $8,001	$25,908 / $23,646	14 / 12
45	$1,523 / $1,276	$12,498 / $11,458	$35,765 / $33,179	16 / 13
55	$2,330 / $1,961	$16,904 / $16,102	$48,710 / $46,617	19 / 15
65	$3,693 / $3,138	$23,475 / $23,255	$67,439 / $65,467	23 / 19

Scale linearly for other face amounts: a $30,000 policy is about 30% of these figures, a $750,000 policy about 7.5 times.

10-pay, 20-pay and paid-up-at-65 whole life: a $25,000 policy

Male, age 35, preferred health. Limited-pay policies cost more each year but build cash value faster and are paid up sooner.

Payment plan	Annual premium	Cash value year 10	Cash value year 20	Year 20 at 3.5%	Break-even
Every year (premiums to 121)	$259	$2,182	$6,477	$4,920	Year 14
20-pay	$437	$4,130	$12,491	$9,519	Year 12
10-pay	$805	$8,139	$13,971	$9,519	Year 10
Paid up at 65	$334	$3,001	$9,003	$6,852	Year 13

Whole life vs universal life vs IUL vs variable life cash value

Same buyer (male, 40, preferred), same $500,000 death benefit and same $450 a month, each projected at its default rate. The last column drops the rate by 2 points.

Policy	Rate	Surrender value yr 5	Cash value yr 10	Cash value yr 20	Cash value yr 30	Yr 30 at −2 pts
Whole life	6%	$15,352	$43,030	$123,622	$251,744	$166,948
Universal life	4%	$13,296	$48,341	$110,682	$184,560	$119,505
IUL	5.5%	$14,316	$52,687	$133,420	$255,988	$165,528
Variable life	6%	$14,665	$54,226	$142,085	$285,541	$184,560

Feature	Whole life	Universal life	Indexed UL	Variable UL
Premium	Fixed, guaranteed	Flexible	Flexible	Flexible
Cash value growth	Guaranteed rate + dividends	Declared rate, minimum guarantee	Index-linked, cap and 0% floor	Subaccount returns, can lose value
Main charges	Built into premium	Premium load, COI, fees	Premium load, COI, fees, rider costs	Sales load, COI, M&E, fund fees
Surrender charge	None (low early values instead)	Usually 10–15 years	Usually 10–15 years	Usually 9–15 years
Lapse risk	None while premiums are paid	Yes if underfunded	Yes if underfunded	Yes, also from market losses
Regulated as a security	No	No	No	Yes (SEC prospectus)

Net cash surrender value: worked example

Cash value	$2,000.00
Paid-up additions (cash value)	$100.00
Dividend accumulations	$125.00
Advance (prepaid) premiums	$250.00
Policy loan + interest	−$500.00
Net cash surrender value	$1,975.00

Loans are subtracted, but for tax purposes the loan paid off at surrender counts as money you received. Surrender charges apply mainly to universal and variable policies.

Cash value vs surrender value vs death benefit

Cash value (accumulated or account value): the savings built inside the policy.

Cash surrender value: what you get if you cancel, after surrender charges and loans.

Death benefit: what beneficiaries receive. With whole life and Option A universal life the cash value is included in it, not paid on top.

Loan value: usually up to about 90% of the cash surrender value.

Taxes on life insurance cash value

Event	Tax treatment	Rule
Cash value growth inside the policy	Not taxed while the policy stays in force	26 U.S.C. 7702
Full surrender	Proceeds (including loans paid off) minus cost basis = ordinary income	IRS Pub. 525; Form 1099-R
Withdrawal from a non-MEC	Tax-free up to the cost basis, then taxable	26 U.S.C. 72(e)
Policy loan from a non-MEC	Not taxable while the policy stays in force	26 U.S.C. 72(e)
Policy lapses with a loan	Loan above cost basis becomes taxable income	IRS Pub. 525
Loan or withdrawal from a MEC	Gain taxed first, plus 10% before age 59½	26 U.S.C. 7702A, 72(v)
Dividends	Return of premium; interest on dividends left on deposit is taxable yearly	IRS Pub. 550
Death benefit	Generally income-tax-free to beneficiaries	26 U.S.C. 101(a)
Exchange for another policy or annuity	No tax if done as a 1035 exchange	26 U.S.C. 1035

Example: an $80,000 policy with a $60,000 loan sends you a check for only $20,000, but with $50,000 of premiums paid the taxable gain is $30,000, because the $60,000 loan payoff counts as proceeds.

Borrowing against cash value

If you stop paying: nonforfeiture options

State nonforfeiture laws protect the cash value if you stop paying; most whole life policies offer three choices:

Cash surrender: take the cash surrender value and end coverage.
Reduced paid-up: a smaller policy with no more premiums. The typical policy at year 20 (age 55) buys about $69,553.
Extended term: the full $100,000 as term coverage for a set time, about 34 years in that example.

2026 whole life dividend interest rates

Insurer	2026 dividend interest rate	Note
MassMutual	6.60%	Record $2.9 billion dividend payout announced for 2026
Northwestern Mutual	5.75%	For most policies; $9.2 billion total 2026 dividend payout

Limits of this estimate

Insurers use their own expense, mortality and dividend scales. An in-force illustration from your insurer is the only exact projection of your policy.
Dividends, UL crediting rates, index credits and fund returns are not guaranteed; check the lower-rate result too.
The death benefit shown is the base face amount; paid-up additions bought with dividends would raise it.
Tax results are federal estimates. Get tax advice before surrendering a policy with a large gain or loan.