What is Cash Value?
Cash Value is a feature of permanent life insurance policies, such as whole life or universal life insurance. It allows a portion of the premiums paid to accumulate over time as a savings component, which the policyholder can access during their lifetime. This accumulated cash can be borrowed against, used to pay premiums, or even withdrawn, though withdrawals may reduce the policy’s death benefit.
The cash value grows over time, typically with a minimum guaranteed interest rate or investment gains, and can provide financial flexibility for policyholders who need funds for unexpected expenses or other financial goals.