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Cash Value Life Insurance Explained Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations. cash value life insurance

Shopping for life insurance can be a daunting task. It can be hard to decipher what makes the most sense for your financial situation with different policy types, riders and head-scratching terminology (accelerated death, anyone?).

Cash value is a component of some types of life insurance. This is a feature that’s typically offered within permanent life insurance policies, such as whole life and universal life insurance.

Policyholders can use the cash value as an investment-like savings account and take money from it.

While buying cash value life insurance may seem like a smart choice, it’s not always the right one. Here’s what you need to know about cash value life insurance.

What Is Cash Value Life Insurance? Cash value life insurance is a policy that contains a cash value account. This cash value component typically earns interest or other investment gains and grows tax-deferred.

You have several options if you want a cash value life insurance policy. Each policy type accrues cash value differently, but in all cases, you can get to your cash value through a loan, withdrawal or surrender. Here are five types of cash value life insurance.