What Does Liquidity Mean In Life Insurance?

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    Christopher Lawrence
    Insurance Broker | Financial Consultant, Lawrence Insurance Consulting, Southern New Jersey
    Liquidity is a term that references the cash value in a life insurance policy.It is the policy holders ability to access the cash values that have grown within the policy. Depending on the structure of the life insurance policy one may have restrictions, and or penalties that limit the liquidity (or their access to their funds). Insurance companies are also required to maintain suitable "reserves" that enable them to readily access enough liquid funds to pay out on their policy holders possible claims.
    Answered on June 19, 2013
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