CFP-Grade Tool
Insurance IRR / XIRR Calculator
Decode what your life insurance policy is really yielding — and compare it to a Mutual Fund alternative.
Annualised return assuming all cashflows occur once per year.
Date-precise return accounting for when each premium / benefit actually occurs.
IRR alone does not decide — talk to your Relationship Manager before surrendering.
Policy Details
Premium (Outflow)
How long premiums are paid
Years of premium already paid (for mid-policy modelling)
Benefits (Inflows)
Add every survival, money-back, guaranteed addition, bonus or pension payout
Policy year when lump sum is paid out
Comparison Benchmark
Long-term equity mutual fund assumption (Regular Plan through your MFD)
At 2.38% p.a., the policy is materially underperforming most risk-free alternatives.
If you invested these premiums in Mutual Funds @ 12%...
Same outflow pattern, invested in a diversified equity Mutual Fund (Regular Plan through your MFD)
Cashflow Timeline
Premiums below the axis, benefits above — over the 20-year policy tenure
What This Means for You
An IRR of 2.38% is a red flag. You are effectively locking capital with negative real returns after inflation.
If the same premiums had flowed into a Mutual Fund (Regular Plan through your MFD) earning ~12% p.a., the terminal corpus would be ~₹73.58 L — a gap of ₹53.58 L (268%) versus what this policy pays out.
Rule of thumb: Term + Mutual Fund (Regular Plan through your MFD) usually outperforms bundled insurance-investment policies over a 15-30 year horizon.
CFP Notes
Many life insurance policies are sold on feature narratives — bonus, money-back, guaranteed addition, loyalty — without ever disclosing the real IRR. The IRR and XIRR you see above strip away the marketing and reveal the pure time-weighted rate of return on your capital.
Term + Mutual Fund (Regular Plan through your MFD) typically outperforms bundled insurance-investment products over long tenures. A pure term plan gives you a much larger life cover for a tiny premium; the balance premium, when systematically invested in diversified equity mutual funds, compounds at materially higher rates.
Before surrendering a mature policy: surrender value in early years is typically a fraction of premiums paid. For policies in their final 3-5 years, completing the term often yields more than surrendering and redeploying. Speak to your Relationship Manager before taking action — the math of surrender + reinvest vs continue to maturitydepends on your specific policy terms, tax position, and remaining tenure.
Calculator results are for illustration purposes only. Actual returns may vary based on market conditions, fund performance, and other factors.
IRR and XIRR are mathematical measures derived from the cashflows you enter. Actual policy returns depend on declared bonuses, loyalty additions, fund NAV movement (for ULIPs), mortality charges, administration charges, tax treatment under prevailing IT rules, and policy-specific terms. Please verify cashflows against your policy bond before acting on these results.
Mutual fund investments are subject to market risks. Read all scheme-related documents carefully before investing. Past performance does not guarantee future returns.
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