Life Insurance Policies and Cash Value

Cash value is an attractive part of many permanent life insurance plans. When the cash value inside a life insurance policy builds up, you can take loans and withdrawals that will provide you with money from paying off a student loan to purchasing a new car.


Only permanent life insurance policies can build cash value, so that means if you want to take advantage of this wealth-building tool you want to investigate whole life or universal life policies.

Whole life policies are the simplest and have the strongest guarantees of any type of life insurance. As long as you pay your premiums on time, you will have a cash value that builds slowly but steadily. As the cash value increases, you’ll see it grow faster too - so it pays to be patient!

Universal life plans also build cash value, but they do so in a little more complicated way. The value inside of a universal life policy is usually not guaranteed, which means you may receive more cash value than expected - or you may get none at all. If you want to make sure that your universal life policy has cash value, ask your agent about overfunding - paying slightly more than the normal premium in order to increase your cash value. Just like a whole life policy, the larger the cash value gets the faster it grows, so taking advantage of the flexibility of a UL plan by overfunding means you can receiving an increasing cash value later in life!

If you want a policy that can build cash value for you and bring you some savings later in life, talk to your agent about these two permanent life insurance plans