There are two permanent cash value life inusrance policies that use interest rates in their crediting method: participating whole life and current assumption universal life.participalting whole life uses a combination of interest rate returns and the return of unused expenses to create a dividend. Current Assumption universal life use interest rate crediting for both their current and guaranteed interest rates.
A term life insurance policy does not earn interest, either in the cash value or face amount. It does not earn interest on the cash value because there is no cash value in term life. The death benefit is exactly what you purchased, and does not grow due to interest earned.
Permanent insurance does earn interest. However, it is not as simple as putting money in a savings account and having the cash grow by a certain percent. A current illustration will show how your premium is applied to the costs in your policy, and how much it will grow at the stated interest rate.
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Permanent insurance does earn interest. However, it is not as simple as putting money in a savings account and having the cash grow by a certain percent. A current illustration will show how your premium is applied to the costs in your policy, and how much it will grow at the stated interest rate.