Cash Value Life Insurance

So what the heck is cash value life insurance and what does it do?

Got any ideas?

Okay…here are a few to get you started!

Cash value is a feature available in all permanent life insurance policies.

Remember that there are 2 main types of life insurance that all the others fall under…they are permanent and term life insurance.

You can learn more about term life here on: What is term life insurance?
Do you really need it?

Cash value is also known as surrender value or maybe cash surrender value by others. You get the picture. ;-)

What is Cash Value Insurance?

When you purchase any type of permanent policy, whether it is universal or whole life, your premium is put into an account which collects interest over the life of your policy.

The more aggressive the growth of your cash value depends on the policy you choose.

Your cash value continues to grow over time and the main benefit of having life insurance with cash value (a.k.a. Permanent life insurance) is if you ever need to cancel your policy, you are entitled to your cash value.

As an example, let’s say you have a policy for $100,000 with a $50.00 premium each month. After about 10 years or so you have paid about $6,000 and your cash value is about $4,000 roughly.

Remember, this is just an example! Yours will probably be very different! :-)

Okay, let’s pretend that you just can’t make the payments or don’t want to anymore and cancel your policy. When you do this you are entitled to that cash value of $4,000 (minus any cancellation fees if any).

So just remember that not only do you get your cash value back after all those years, but you are were also protected for those 10 years!

This is really something to think about!

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