What Life Insurance Builds Cash Value?

  1. 0 POINTS
    Contact Me
    David RacichPRO
    Fountain Hills, Arizona
    To clarify the question: what life insurance “can” build cash value? Generally, there are four types of cash value products that could generate accumulating cash values: Current Assumption Universal Life, Indexed Universal Life, Variable Universal life and Participating Whole Life Insurance. The performance of interest rates, indices and market equities may or may not credit any earnings and life insurance has policy expenses. Each policy owner must assess their risk tolerance for each type of life insurance contract. Participating whole life insurance “base” policies have guaranteed cash values. Lastly, a few guaranteed universal life insurance policies have some cash values in the later years, but should not be considered as a cash accumulation vehicle.
    Answered on May 11, 2013
    +0
    1 Thumb up 0
    +1 this answer
    flag this answer
  2. 37376 POINTS
    David G. Pipes, CLU®, RICP®
    Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
    The actual cost for providing insurance for one year increases as an individual ages.  In order to provide a level death benefit in exchange for a level premium, insurance companies must charge more at the younger ages to offset the cost at the older ages.  This “extra money” becomes the cash value of a permanent life insurance policy.  Permanent life insurance policies come in several stripes depending on guarantees included in the policy.  The company will surrender the cash value at any time in exchange for a release from the company’s promise to pay the death benefit.  They will also allow the owner to borrow against the cash value of the policy.
    Answered on June 18, 2014
    flag this answer
    3. Did you find these answers helpful?
    Yes
    No
    Go!

Add Your Answer To This Question

You must be logged in to add your answer.


<< Previous Question
Questions Home
Next Question >>