Term Life Definition.com - Explaining and Defining Cash Value.

What is Cash Value?



Cash Value


In a life insurance policy, the amount of money, before adjustment for factors such as policy loans or late premiums, that the policy owner will receive if the policy owner allows the policy to lapse or cancels the coverage and surrenders the policy to the insurance company. Cash values are a feature of most types of permanent life insurance, such as whole life and universal life. Also called inside buildup and policy owner's equity.

Also, cash value that builds up with a whole life policy is the interest earning section of the life insurance policy. Part of your annual premium goes to building the cash value and earns interest.

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