Under direct recognition the loaned portion of your cash value stops earning the ordinary dividend and instead earns a credit pegged to the loan rate, less an expense charge. Choose whether to let interest accrue or repay monthly, then hit calculate.
5 years
Up to date
The pivot: credit vs. dividend
Loaned earns
vs
Dividend
Monthly repayment · amortized over years
— / mo
Total paid
Total interest
Payments
Framing A · Opportunity cost
Vs. leaving it untouched in the policy
—/yr
Forgone dividend + expense charge, on the starting balance. The right number if the alternative was to not touch the policy at all.
Framing B · Financing drag
Loan interest, net of the credit earned
—/yr
Loan rate minus the credit the loaned collateral earns. The right number if you're comparing this loan to borrowing the same amount elsewhere.