Gonna preempt Exgingi and tell you to add the value of the underlying coverage to the IRR.
Don't I already have that accounted for? The CV in my spreadsheet is copied from the Total CV in the screenshot. It is the sum of the basic policy and the PUA valuations.
How does that account for the value of the additional DB above and beyond the CV at each point? If you were comparing to other assets and their performance, apples to apples would involve some sort of (cheaper) insurance coverage, no?
My simplifying assumption is that the CV is the difference between the NPV of the future DB and the NPV of future premiums (takes me back to my MLC sitting). I see why that could be inappropriate since that equation doesn't necessarily hold, but is it a reasonable starting point?. What would you propose to use instead?
I didn't phrase this very well. What I mean is that someone will look at your calcs and say 4% over 15 years? That should be very beatable. But the underlying assets of the alternative portfolio would need to be higher than that to break even, since you'd have to buy term (or whatever coverage) to make it apples to apples.
