Cash Value

With regards to life insurance, the term “cash value” refers to the equity held by a permanent life insurance policyholder.

When you use permanent life insurance products like mixed life insurance, part of the premiums you pay are used to cover the cost of life insurance and part of the premiums build equity in your policy. Your equity in a policy is its cash value.

The cash value of a life insurance policy is much like money in a bank account. It belongs to you as the policyholder and can be borrowed or pledged against a loan under certain circumstances.

Important: The cash value of a life insurance policy is not to be confused with the face value of a life insurance policy. The policy’s face value denotes the benefit which will be paid out when you die.

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