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"Planning is the insurance money cannot buy."
J L Adamsson

Cash Value life insurance

What is cash value life insurance?

From the National Association of Insurance Commissioners

Of which, I am not one.  In this justifiably regulated industry, as a matter of best-practice and compliance, I see no need to impress anyone with my own terminology definitions, when we can simply go to the authorities to define those terms for you.


"Cash Value Life Insurance is a type of insurance where the premiums charged are higher at the beginning

than they would be for the same amount of term insurance. The part of the premium that is not used for the

cost of insurance is invested by the company and builds up a cash value that may be used in a variety of ways.

You may borrow against a policy’s cash value by taking a policy loan. If you don’t pay back the loan and the

interest on it, the amount you owe will be subtracted from the benefits when you die, or from the cash value

if you stop paying premiums and take out the remaining cash value. You can also use your cash value to keep

insurance protection for a limited time or to buy a reduced amount without having to pay more premiums.

You also can use the cash value to increase your income in retirement or to help pay for needs such as a child’s

tuition without canceling the policy. However, to build up this cash value, you must pay higher premiums in

the earlier years of the policy.  Cash value life insurance may be one of several types; whole life, universal life

and variable life are all types of cash value insurance."

The 3 Types of Cash Value Life Insurance

1." Whole Life Insurance covers you for as long as you live if your premiums are paid. You generally pay the

same amount in premiums for as long as you live. When you first take out the policy, premiums can be several

times higher than you would pay initially for the same amount of term insurance. But they are smaller than the

premiums you would eventually pay if you were to keep renewing a term policy until your later years.

Some whole life policies let you pay premiums for a shorter period such as 20 years, or until age 65. Premiums

for these policies are higher since the premium payments are made during a shorter period."

2. "Universal Life Insurance is a kind of flexible policy that lets you vary your premium payments. You can

also adjust the face amount of your coverage. Increases may require proof that you qualify for the new death

benefit. The premiums you pay (less expense charges) go into a policy account that earns interest. Charges are

deducted from the account. If your yearly premium payment plus the interest your account earns is less than

the charges, your account value will become lower. If it keeps dropping, eventually your coverage will end. To

prevent that, you may need to start making premium payments, or increase your premium payments, or lower

your death benefits. Even if there is enough in your account to pay the premiums, continuing to pay premiums

yourself means that you build up more cash value."

3. "Variable Life Insurance is a kind of cash value life insurance where the death benefits and cash values depend on the

investment performance of one or more separate accounts, which may be invested in mutual funds or other

investments allowed under the policy. Be sure to get the prospectus from the company when buying this kind

of policy and STUDY IT CAREFULLY. You will have higher death benefits and cash value if the underlying

investments do well. Your benefits and cash value will be lower or may disappear if the investments you chose

didn’t do as well as you expected. You may pay an extra premium for a guaranteed death benefit."

Related Pages

  • Life Insurance Quotes

    Life insurance quotes for living too long, dying too soon, or losing income to illness, injury, or economic downturn.

  • What is Term Life Insurance

    What is term life insurance? It's like leasing or renting life insurance for a period of time. At the end of the term you own nothing, but enjoyed the protection while you had it.

  • Life Insurance

    Life insurance as defined by The National Association of Insurance Commissioners

The Rest Of Our Retire Early More Often Story

Looking for a sabbatical lifestyle?  You might consider becoming an Adamsson Associate for the support and encouragement you and yours are going to need.  It can be hard living counter-culturally.  On top of that, we don't have all the answers, even after 3 complete business cycles. 

Every sabbatical year has been unique.  Every six-year business cycle has been imperfect.  Despite that, we don't beat ourselves up when we fail.  We choose to approach this all as a gift, and with a sense of humor, instead.  Recreationally, really.  Why?  Well . . . isn't that our purpose?  To re-create?

"I'm gonna figure this sabbatical-thing out, even if it kills me."  Look, rather than die trying, might we suggest living, instead?  The last thing we want to be is heavy-handed.  A formulaic approach seems antithetical, untenable.  It simply won't lead to the sustainable, generational transformation that we, and our clients, desire.

We're simply pointing out that if you start early enough, you could get seven tries to retire early more often.  Maybe eight.  Seven or eight tries-- a retirement, every seventh year.   But, only for a year . . . and, only if you want to.  One way, (if you want to,) would be to join us in delivering

our RestEquity portfolio of financial services:

R isk Management
E xecutive Compensation/Employee Benefits
S afe Money Places for Lifetime Income, Longterm Care, and Legacy Planning
T rust Funding for Special Needs, Charitable Giving, and Completely Private Bequests w/o Probate

Or, perhaps you're in another industry simply looking to limit threats, leverage opportunities, and leave a legacy of living sabbatically for your next generation.  So that they, also, can limit their threats, leverage their opportunities, and leave their legacy of living sabbatically for their next  generation.

So that . . .


Whether you dream of becoming an Adamsson Associate, or simply working with one, Download our Financial Picture form, as a first step.  Fill it out completely, save it to your system, then return it securely using our encrypted document transfer.  Or, don't.

Providing this document is  not necessary to get on our schedule, of course, but it certainly will help us make the best use of our time when we get our first chance to chat.

Customer satisfaction: just might be the best insurance for business money can't buy.

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