Tax-Free (3 Gens Total)
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Sum across G1 + G2 + G3
Total premiums paid
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Cumulative funding
Wealth multiplier
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Tax-free ÷ premiums
Break-even year
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Cash value ≥ premiums
Cash value compounds tax-deferred inside the policy. The death benefit grows from paid-up additions purchased by dividends. Break-even is the year cumulative cash value catches up to cumulative premiums paid.
At each generational transition (G1→G2→G3), the death benefit transfers tax-free to heirs. For corporate ownership, the CDA credit (Death Benefit − ACB) is the tax-free portion that can flow out to shareholders.
The taxable comparison invests the same premium each year in a portfolio earning the chosen pre-tax return, taxed annually as interest income at the marginal rate. A simple, conservative benchmark.
| Year | Age | Gen | Premium | Cash Value | Death Benefit | ACB | CDA | Tax-Free → Heirs | Taxable Alt |
|---|