What You Need to Know About Cash Value Life Insurance
Cash value life insurance is a type of permanent life insurance that includes a cash value savings component and lasts for the entirety of the policyholder's life. The policyholder can use the cash value for various purposes, including as a source of loans or to pay insurance premiums.
Cash value life insurance has an investment component from which you may borrow in an emergency.
Types of Cash Value Life Insurance
The cash value option is available on the following types of permanent life insurance:
Whole life insurance policies
offers a cash value that accumulates over time. These policies typically have higher premiums than term life insurance, but the cash value is tax-deferred and can grow over time.
Universal life insurance policiesalso offer a cash value, usually invested in securities or other investments. The cash value may be less liquid and may not grow as quickly as with whole-life policies.
Variable universal life insurance policies
allow the policyholder to choose how the cash value is invested, resulting in quicker cash value growth.
Indexed universal life insurance policies
here, the cash value is adjusted periodically to reflect changes in the underlying investments.
How Does Cash Value Life Insurance Work?
Cash value life insurance works by investing the cash value of the policy in a variety of different investments, resulting in rapid growth in the cash value. This growth is typically tax-deductible, making the policy more affordable than other types of life insurance.
Benefits of Cash Value Life Insurance
- More affordable than other types of life insurance
- Can multiply in value
- Offers a higher payout if the policyholder dies before the policy expires
Is There a Cash Value in Every Life Insurance Policy?
No, not every life insurance policy has a cash value. Cash value is typically only offered in policies that are designed specifically for people who want to buy life insurance without having to worry about their health or their loved ones.
Can I Cash in My Life Insurance Policy's Cash Value?
Yes, you can withdraw from the cash value of your life insurance and use the money in any way you like.
How Long Does It Take for Life Insurance to Accumulate Cash Value?
It can take several years for the cash value of a life insurance policy to grow to its full value.
Get Tailored Life Insurance Coverage with Amity Insurance Group!
Are you looking for cash-value life insurance in McKinney, Texas? Contact us today at Amity Insurance Group to get started on your personalized coverage.