How long does it take to break even?
Ask for the year in which the guaranteed column first equals total premiums paid, and read it from that column rather than the illustrated one. That single year is a plain summary of the cost structure and it already exists in the document being presented. A general figure means nothing.
What kind of answer this is
- Claim type: Contract fact
- Jurisdiction: Contract dependent
The figure is readable in any illustration's guaranteed column. Nothing here predicts what happens after that year.
How it works
The figure moves with the design, the funding pattern, the age at issue and the insurer, which is why a number quoted from someone else's proposal is not information. A design whose guaranteed column reaches cumulative premiums sooner costs less than one where it takes longer.
The cost or the catch
Whatever the two documents happen to project alongside is not part of that comparison, because a projection is not a promise. Reading the projected column as though it were the guaranteed one is the commonest way a buyer misjudges what has been agreed.
Where this answer may not apply
- This measures cost recovery inside the contract. It says nothing about what the same money would have done elsewhere.
- A year taken from the projected column is not the same figure at all, because a projection is not contractual.
- An in force illustration on an existing contract restates the figure from where the contract actually stands, which may differ from the original.
What to verify in your own contract
- The guaranteed column and the cumulative premium column, printed side by side.
- The first row at which the two figures meet.
- Whether the designs being compared assume the same funding pattern.
- Whether any premium offset assumption is being relied on to reach that row.
Continue to the full explanation
Read the complete costs and risks analysis.
Accountability and disclosure
- Written by
- José Salloum
- Professional capacity
- Financial security advisor, Canadian Wealth Creation Centre Inc., operating as IBC Financial
- Reviewed by
- Insurance and contract education tier, reviewed under a licensed insurance professional's own authority
- Jurisdiction
- Contract dependent
- Last reviewed
- 2026-08-30
- Version
- 1.0
- Compensation disclosure
- Canadian Wealth Creation Centre Inc., operating as IBC Financial, may receive insurer paid compensation if a policy is purchased. It takes the form of first year compensation followed by renewal compensation, and the amount varies by insurer, product, age, premium, contract design, riders and the arrangement with the managing general agency. No single figure would describe every contract honestly, and none is published here.
- Report a correction
- Info@ibcfinancial.com. Write without a policy number, medical information or account details.
Last reviewed 2026-08-30. By Jose Salloum, Financial Security Advisor.