How do I explain the difference between Total IRR and Annual ROR on Life Values?   The Total Internal Rate of Return is based on the cash value (and we also have one based on the death benefit) and it starts very low and increases over time.  It usually shows a negative 100% first year because we have zero cash value in the first year but the IRR appreciates and increases over time. It is however, weighed down by the early years as IRR is a “cumulative” column as opposed to an annual column.   Annual Rate of Return on Cash Value calculates the ROR on the cash value for every year without carrying the baggage from previous years. Whereas the IRR calculation has all the previous negative years that are weighing it down. The annual ROR on Cash value looks at each year separately, so you’ll see a positive annual return on cash value earlier, typically around the 3rd or 4th year, sometimes a bit later.