Cash Value Basics
What cash value is, what it is not, and why illustrations matter. A good decision usually comes from comparing policy details, not from chasing the first low premium.
Track four different numbers
Premiums paid, account or cash value, net surrender value, and death benefit are not interchangeable. Loans, withdrawals, surrender charges, dividends, index credits, subaccount performance, and cost-of-insurance charges can move them differently. Ask for current and guaranteed values at the same dates.
Key record: Use the policy ledger and an in-force illustration; record tax basis, loan balance, surrender charge, and lapse date under lower assumptions.
Documents to gather
- Current policy data page and riders.
- Application and any amendments.
- Latest annual statement or illustration.
- Quote assumptions and underwriting offer.
- State-required notices when applicable.
Questions to verify
Finish with a written decision
Copy the controlling policy language and dates into your notes. Mark each number as guaranteed, current, or illustrated; identify the person or organization that supplied it; and save any written answer. Before ending or replacing coverage, confirm when the new protection becomes effective and whether a free-look, contestability, surrender, or tax consequence applies.
Reliable sources
- Your issued policy and application copy.
- NAIC consumer life insurance resources.
- Your state insurance department.