What is the Cash Value of a life Insurance Policy?
One important feature of permanent life insurance, which is not found in most term life insurance policies, is a “cash value.” When your premium payments are more than the cost of insurance, the excess goes into a cash value account and draws interest. It is the “savings” portion of a life policy. The actual amount depends on many factors, including: The policy’s face amount. How long you’ve owned the policy. Length of the premium payment period. Whether you have any outstanding policy loans. Your policy should have a table of cash values. If it doesn’t, contact your agent. Having cash value offers you some options: 1. You can cancel the policy and receive the cash value as a lump sum: the surrender cash value. 2. If you need to stop paying premiums, you can use it to continue your current policy for a specific time. 3. You can withdraw part of the cash value in the form of a policy loan. Surrender Cash Value Cancelling a life insurance policy is called surrendering it. Surrendering th
