Cash Value
/kash VAL-yoo/
The savings component of permanent life insurance.
Definition
Cash value is the savings component of permanent life insurance policies like whole life and universal life. Part of your premium goes into this account, which grows tax-deferred. You can borrow against it or surrender the policy for its cash value.
Example
After 20 years, the whole life policy had accumulated $50,000 in cash value that could be borrowed against.
More Life Insurance Terms
Coverage for a specific period with no cash value.
Permanent coverage with guaranteed cash value.
Flexible permanent coverage with adjustable premiums.
The amount paid to beneficiaries when the insured dies.
The person who receives the insurance payout.
The stated amount of coverage on a life insurance policy.
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