Cash Value Component

The cash value component is an integral feature of permanent life insurance policies, such as whole life, universal life, and variable life insurance. It represents a portion of the premiums that accumulate within the policy over time, separate from the death benefit.

This cash value grows at a rate determined by the insurance policy terms or the performance of chosen investments, and it can often grow tax-deferred, enhancing its growth potential.

Policyholders can utilise the cash value for various purposes: they can withdraw funds, borrow against the cash value, or, if they choose to terminate the policy, receive it as a cash surrender value.