Determine the present value of future profits from the existing business
Project expected future cash flows from in-force policies
Discount projected cash flows using an appropriate risk-adjusted discount rate
Subtract the cost of required capital from the present value of future profits
Add the adjusted net asset value of the company
Include the value of shareholder capital allocated to the business
Add the present value of future profits from new business if calculating total economic value
Adjust for taxes, expenses, lapses, mortality, morbidity, and investment returns
Use best-estimate assumptions for all actuarial and financial projections
Sum the adjusted net asset value and the present value of future profits to obtain embedded value