Insurance
Invested difference
Future value of investing the monthly premium difference at the assumed return.
The Formula
FV = (whole - term) x ((1 + r/12)^(12y) - 1) / (r/12)
Future value of investing the monthly premium difference at the assumed return.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| dP | Premium difference | currency | Whole premium minus term premium. |
| r | Annual return | rate | Return on the invested difference. |
What Each Symbol Means
dPcurrency
Premium difference
Whole premium minus term premium.
rrate
Annual return
Return on the invested difference.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate term vs whole life insurance page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate Term Vs Whole Life Insurance, filed under Finance. Every number the guide produces comes from substituting into this one line.