Does Whole Life Insurance Have Cash Value?
4330 POINTSview profileJerry Vanderzanden, CLU, ChFCCo-Founder, Coastal Financial Partners Group, CaliforniaWhole life insurance is designed to have cash value. The policy-owner pays a fixed, level premium and cash values accumulate at a stated interest rate and are guaranteed to grow over time provided the premium is paid. Many whole life policies also participate in policy dividends which are not guaranteed but, when paid, can add to the cash and death benefit values of the policy.Answered on April 30, 2013flag this answer
0 POINTSContact Meview profileDavid RacichPROFountain Hills, ArizonaWhole life insurance can accumulate cash values. Participating whole life can accumulate additional cash values if the policy is designed with a maximum term rider and a paid up additions rider. This tactic could be part of a long term strategy for savers. Dividends up to basis can be withdrawn tax free and policy gains through policy loans. Keep in mind that policy loans charge use a spread loan interest rate and a few companies use a more expensive, direct recognition policy loans. The big caveat here is that the policy must be kept in force for the life of the insured. If the policy was surrendered, all gain in the policy via loans, distributed and internal, would be subject to ordinary income tax.Answered on May 13, 2013+01+1 this answer
0flag this answerview more answers by David Racich- 1313 POINTSview profileLenny RobbinsPrincipal, LifeNet Insurance Solutions, Redmond, WAYes, whole life insurance is designed to have cash value accumulate over time. This "cash" can be used to purchase additional insurance, decrease premiums or borrow from the policy. Typically, when the insured dies, the cash value is NOT part of the death benefit. This is perhaps the most misunderstood fact about whole life.Answered on July 19, 2014flag this answer
4249 POINTSview profileGary LanePresident, Lane Independent Agency, Southern CaliforniaYou betcha! That is a major reason folks buy this product. It takes about 1 1/2 yrs before you see some growth, since the cost of establishing the program has to be made up by the carrier. But then you will see steady growth, in good times and in bad, with no exceptions. You can then borrow against it, and even never pay it back, keeping the money tax free (although it will affect the death benefit). You can fund college education with it, or even your retirement. So over time, it actually is less expensive to buy whole life than term. Thank you. GARY LANE.Answered on July 19, 2014flag this answer
21750 POINTSview profileJim WinklerCEO/Owner, Winkler Financial Group, Houston, TexasThat is a great question! Whole life policies do indeed have a cash value feature. It is one of the really good reasons to consider purchasing one. After a few years, the policies can start accumulating funds fairly quickly. They are easily accessible, and are tax free and generally at very low interest rates. It is an excellent way to get money quickly, especially if the banks won't give it to you. I hope that helps, thanks for asking!Answered on July 21, 2014flag this answer
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