Another way to evaluate the financial efficiency of a life insurance policy is through an internal rate of return (IRR) analysis. It isn't possible to determine the actual IRR of a life insurance policy until the insured dies. Still, an approximate internal rate of return can be determined each year by comparing the likely death benefit with the total premiums paid by the end of that year. A policy owner can come to some conclusions about the policy’s potential financial efficiency by examining the internal rate of return. Internal rates of return on death benefits are generally high during the early years of coverage and decrease over time. Generally, the rates of return for the years close to the insured’s life expectancy should receive the most scrutiny.