Save up to 70% off Life Insurance!

Male Female

Save up to 70%

off Life Insurance!

Male Female

What Is Cash Value Life Insurance?

Cash value life insurance offers the same death benefit of term life insurance, but with a savings feature which allows paid premiums to gain interest if the funds are not used to pay a death benefit. For example, a cash value life insurance policy may allow for borrowing against the policy.

Things to Consider Before Purchasing Cash Value Life Insurance

There are a few things to consider when purchasing cash value life insurance. While you may be permitted to borrow against the policy, in the event a loan is outstanding at the time of the insured’s death, the balance due will be deducted from the death benefit. In addition, loans made against the policy must be paid back with interest. Because of their accumulated value, cash value life insurance premiums are higher than term life insurance premiums.

Know your Options

Many experts suggest not choosing cash value life insurance for the purpose of eventually surrendering the policy for its cash value as this comes with hefty penalties. As an alternative, some advise to purchase term life insurance and place funds saved from less expensive premiums in safe and easily accessible investment options such as mutual funds.