Every year at my policy anniversary I get excited about paying premium, and I know how that sounds.
This is a whole life policy I own on my wife, and I'm six years in. When we started, the plan was to fund it heavily for 10 to 12 years. The base premium was small, about $5,000, and we paid about $500 a month toward it. Most of the money would come as extra paid-up additions. The 2023 plan called for $50,000 a year for three years, then $35,000, and after that about $6,000 a year.
The policy turned out to be flexible enough for me to fund it more heavily than that. Last year the software let me illustrate $72,000 in a year instead of $50,000. More money in sooner makes a policy more efficient, so the heavy-funding window shrank from 10 or 11 years to a little over six. After that I drop to small premiums and send the freed-up cash flow toward other policies or toward loan payback.
Here are the numbers. The 2023 illustration showed a year-six guaranteed cash value of $408,000 and a projected value of $417,000 using the current dividend. After I added about $44,000 beyond what I had illustrated, the year-six numbers moved to $457,000 guaranteed and $464,000 projected. That's $49,000 more on the guaranteed side for $44,000 more paid in. On the projected side it's $47,000 more. The guaranteed side assumes no dividends and the highest insurance charges, which is why it's the floor, not the forecast.
After this year's payment the actual guaranteed value is $461,000 and the projected value is $466,000, a little ahead of last year's forecast. The projection at age 75 now reads over $2 million with no further premium, up from roughly $1.8 million in last year's version. Those numbers depend on dividends, which aren't guaranteed, so treat the projected side as a projection and not a promise.
There's a cost to this. A heavily funded policy takes a lot of cash flow for those years, and once you've started it, a loan against it still reduces the cash value and death benefit until you pay it back. Plan the funding window against your own income before you commit. The MEC line sets the maximum, and your own cash flow sets the practical limit, which is almost always lower.