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Cash Value Life Insurance

Cash value plans let you build up savings that you can access throughout the life of your policy, giving you one more way to keep your family covered financially.

What is cash value life insurance?

Cash value life insurance is a type of policy with built-in savings. You can access the funds while you’re still living and use them in many ways, including paying monthly premiums or covering everyday expenses.

Cash value is a feature of permanent life insurance, which lasts your entire life as long as you pay your premiums. In some cases, you may also be able to build cash value with term life insurance, which lasts for a set period of time.

While cash value plans are typically more expensive than plans that only offer a death benefit, they can provide an extra cash cushion to help with your family’s personal finances and also help grow your savings over time.

How do cash value life insurance policies work?

Each time you make a premium payment, part of it goes toward your cash value account. Depending on the type of life insurance you pick, the cash value will generally increase by a set amount each year or earn interest.

As your cash value grows, you may be able to:

  • Take a loan from it if you need extra cash
  • Use it as collateral for a loan
  • Use it to pay your premiums

One thing to keep in mind is that your cash value is part of your policy’s death benefit, not a separate fund. If you take a loan from your cash value to pay for everyday expenses, your insurance company is basically letting you borrow part of your death benefit. That means you’ll need to replace any funds you take out for your beneficiary to receive the full death benefit. Also, if you decide to cash out the account completely, your policy will automatically come to an end.

Benefits of cash value life insurance

With cash value policies, you get:

  • Access to cash

    Access to cash

  • Flexibility


  • Financial protection

    Financial protection

Is cash value life insurance right for you?

If you have the disposable income for a cash value plan and want a guaranteed way to save, whole life cash value life insurance can help you grow your nest egg over time. Many people invest in a cash value plan to build savings for future expenses, like retirement or college loans.

Cash value life insurance is typically best for people who have maxed out other tax-deferred savings vehicles, like a 401(k) and IRA, and can commit to a long-term investment. If you’re not already making the max contributions to your 401(k), you may want to save there first. And since cash value life premiums are higher than premiums for term life insurance that offers only a death benefit, it’s a good idea to evaluate your budget and what you can afford.

Questions on cash value lifeinsurance

Life insurance quotes through eFinancial

At eFinancial, we’re dedicated to providing expert, personalized support as you shop for life insurance plans. You’ll have access to high-quality, affordable products from more than 20 insurance companies, so you can choose from a variety of life insurance policies. Our agents will walk you through the approval process so you can get covered as quickly as possible. We’re here to help.

To get started, request your free, no-obligation online quote or call 833-489-1026 to talk with one of our agents.