Cash Value
A value that may build inside certain permanent life insurance policies according to guarantees, credits, charges, and policy performance.
Why it matters
It can support loans or withdrawals, but using it may reduce benefits, create lapse risk, or cause tax consequences.
Where you may see it
Policy illustration, annual statement, loan provisions, surrender table, and in-force illustration.
What to verify
Guaranteed versus non-guaranteed values, crediting method, charges, access rules, loan rate, and lapse impact.
Do not confuse it with
Death benefit, which is the amount payable at death under the contract and is not automatically equal to cash value.
Read Cash Value in context
Start with the exact sentence where the term appears, then read the definition, schedule, and any referenced rider together. The practical concern is this: It can support loans or withdrawals, but using it may reduce benefits, create lapse risk, or cause tax consequences. Locate the relevant records—policy illustration, annual statement, loan provisions, surrender table, and in-force illustration.—and compare them with the issued contract rather than a sales summary.
Before signing, changing coverage, or making a claim decision, record the points that control the result: Guaranteed versus non-guaranteed values, crediting method, charges, access rules, loan rate, and lapse impact. If another policy uses similar wording, do not assume it has the same effect.
Keep the dated page or form with your notes. If the definition changes the benefit, premium, ownership rights, or a deadline, ask the issuing insurer for a written explanation tied to the policy number.
Reliable places to check
- Your issued policy and application copy.
- NAIC consumer life insurance resources.
- Your state insurance department for licensing and consumer help.