1. 10968 POINTS
    Tim Wilhoit
    Owner, Your Friend 4 Life, Brentwood TN
    Yes, whole life and universal life insurance policies are considered permanent life insurance and do accumulate cash value that can be used for numerous things. The typical whole life insurance policy takes 5 to 7 years to accumulate cash as the first few years cover the cost of insurance. There are ways to maximize your premiums to build cash value if that is your goal. An experienced insurance agent can show you your options to minimum fund, target fund and maximum fund your whole life insurance policy. Your cash value can later be used to pay up your premiums, retirement funds, children college fund or even cash for a critical illness.
    Answered on January 28, 2015
  2. 2777 POINTS
    Terry A. McCarthy, CLU, ChFC
    President, Insurance Associates Agency Inc., West Chester, OH
    A Permanent insurance policy like a whole life can build a cash value because it was designed to do just that. At the age of purchase your insurance company knows how long you will live by average. The premium they charge for each unit of coverage (usually per 1000) is calculated to cover the mortality costs, company costs and profits, and the reserve build up you know as cash value. At interest, the reserve builds even more because the interest growth is not subject to current income taxation. The actuarial mathematicians at the insurance company have even figured out how to pay the life insurance proceeds if you die without accomplishing any cash value at all.
    Answered on February 1, 2015
  3. 37376 POINTS
    David G. Pipes, CLU®, RICP®
    Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
    A whole life policy accumulates enough money to pay the face amount at the “endowment age,” normally 100-120 years old. It also pays the face amount if the insured doesn’t live to the endowment age. As the money accumulates it becomes the “surrender value” of the policy or the cash value. If you chose to take the cash value, it will be less than the face amount.
    Answered on February 3, 2015
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