Cash value is a feature included in certain types of permanent life insurance policies, such as whole life and universal life insurance. Unlike term life insurance, which only provides coverage for a specific period of time, permanent life insurance policies can build cash value as premiums are paid.
If you have a life insurance policy that provides cash value, a portion of every payment will go towards the policy’s cash value account. This account grows gradually, often on a tax-deferred basis, depending on the type of policy you have. Over the years, cash value can become a valuable financial resource that you can access while you are still living.
One of the main benefits of cash value life insurance is flexibility. In many cases, you can borrow against this cash value, use it to help pay future premiums, or even withdraw a portion of the funds if needed. Some also use cash value as part of their long-term financial strategy or as an additional layer of financial security.
It is important to understand that accessing the cash value can reduce your life insurance policy’s death benefit if the borrowed or withdrawn amount is not repaid. Because of this, it’s always a good idea to review your options with us carefully.
While cash value life insurance is not the right fit for everyone, it can provide lifelong coverage along with added financial benefits. Work with us, and we can help you compare policy options and determine whether a cash value policy aligns with your needs, goals, and budget.