Cash Value
The amount of money saved in a whole life policy that the policyholder can take by either borrowing against or cashing in the policy
Cash value refers to the amount of money that a life insurance policyholder can receive by surrendering their policy to the insurer. It is the amount of money that has accumulated over time in the policy, which includes the total premium paid by the policyholder and any interest earned on those premiums by the insurance company.
The cash value of a life insurance policy grows tax-deferred until the policy is surrendered, and it can be used in a variety of ways, such as to pay off a loan or to supplement retirement income.
It’s essential to note that withdrawing cash value from a policy can reduce the death benefit of the policy, which can leave beneficiaries with a smaller payout in the event of the insured’s death. Additionally, any withdrawal may also be subjected to surrender fees and taxes. Therefore, it’s important to consult an insurance professional before making any decisions that affect your life insurance policy.
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