Before we review the benefits of cash value life insurance, let’s start with a brief introduction.
Cash value life insurance DEFINITION: a permanent life insurance policy that provides a death benefit that also has an account that accumulates cash value. A policy is a life insurance contract between you, the policy owner and insured, and the insurer, where the insurer agrees to pay a death benefit to your beneficiary upon your payment of premiums. Your premium goes into a cash account, minus any costs and fees.
Cash value can accumulate within a policy in a number of ways and the formula used will dictate the type of permanent life insurance policy. Rather than diving into the various types of cash value life, this article will keep a more general focus on the idea of accruing cash within a policy.
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