Co-Founder, Coastal Financial Partners Group, California
There are two key values to a life insurance policy: its death benefit and its cash value. The death benefit is the amount the policy pays as a lump sum (generally income tax free) when the life insured dies. The cash value is what the policy is "worth" to the owner during life. Term life insurance has no cash value while permanent policies are a current asset. The cash value of a policy can be accessed during life if necessary through withdrawing some of the money as cash or taking a policy loan. Or, the policy could be canceled for the cash surrender value - the total value of the asset. At this point, the death benefit amount is canceled.
If you are still living the death benefit is not worth anything currently. But the cash value has a definite worth. The cash surrender value is what most people would consider the worth of you life insurance. But there is also a reduced paid up amount that you could opt for that would possibly be worth more to you.
Agent, Rural Mutual Insurance Co., Union Grove, WI
What is your definition of worth. Are you speaking of the face value of the policy, the death benefit, or the cash value. The face value is the dollar amount that the policy is originally issued for. Death benefit depending on the policy can be greater than the original policy issue or may be lower due to loans taken out from the policy's cash value. Whole life or permanent life insurance policies will sometimes build cash value over time.
If are the insured person on a Term Life insurance policy, it is only worth something if you pass away. Then the face amount of the policy will be paid to your beneficiary.
If you own a Whole Life or Universal Life policy, the proceeds will be paid to your beneficiary if the insured person passes away. But there is also a cash value component to these policies. If you cashed your policy in before death, the surrender value (cash accumulation minus surrender charge and fees) would be the worth of your policy to you.
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
Life insurance is worth the face amount to those who you love if you should die prematurely. Life insurance is worth the cash value to you should you need to make an unsecured loan or surrender the policy for cash. Most important reason, though, is that life insurance will give you peace of mind knowing that those you love will not suffer unnecessarily if your should die.
That is a great question! I am going to assume that your question is a straight up value question, and not the metaphysical emotional value one. The face value, or death benefit is the amount that the policy will pay to the beneficiary when the insured passes away. That benefit is payable when the insured passes on a whole life policy, and only if the insured passes during the specified term on a term life policy. I hope that was what you were looking for, thanks for asking!
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If you are still living the death benefit is not worth anything currently. But the cash value has a definite worth. The cash surrender value is what most people would consider the worth of you life insurance. But there is also a reduced paid up amount that you could opt for that would possibly be worth more to you.
If you own a Whole Life or Universal Life policy, the proceeds will be paid to your beneficiary if the insured person passes away. But there is also a cash value component to these policies. If you cashed your policy in before death, the surrender value (cash accumulation minus surrender charge and fees) would be the worth of your policy to you.