The maturity value of a PLI policy is calculated using a simple formula:
PLI Maturity Value = Death Benefit + [(Annualized Policy Premiums - Age Adjusted Cost of Insurance) x Policy Years]
The death benefit is the guaranteed payout that the policyholder's beneficiaries will receive if the policyholder dies during the policy term. The annualized policy premiums are the total premiums paid over the policy's term, divided by the number of years in the policy term. The age-adjusted cost of insurance is a measure of the insurance company's costs associated with insuring a policyholder of a particular age.
Policy years is the number of years that the policyholder has been paying premiums.
This formula produces a maturity value that is guaranteed by the insurance company. If the policyholder dies before the policy matures, the beneficiaries will receive the death benefit plus any accumulated dividends. If the policyholder lives to see the policy mature, he or she will receive the maturity value plus any accumulated dividends.