Net asset value is the asset value minus the loan — what you could walk away with if you surrendered the policy and settled the loan. The dashed marker follows the year on the slider above.
| Year | Premium | Charges | Loan taken | Asset value | Loan balance | Net asset value | Death benefit | Family keeps |
|---|
Charges are the premium load, the annual policy fee, and the cost of insurance for that year. Loan taken is the amount drawn that year; the loan balance compounds and is never repaid. Family keeps is the death benefit after the loan is deducted.
Illustrative only — not a projection of any specific policy. Assumes a level crediting rate with no zero years, a 110% corridor on the death benefit (it is always at least 10% above the asset value), loan interest that compounds and is never repaid, and simplified charges. A real illustration varies the crediting rate, applies an index cap and floor, and uses the carrier's own cost-of-insurance table. Lapse is flagged when the loan balance passes the asset value; at that point the outstanding loan generally becomes taxable income.