Cash Value

What Does Cash Value Mean?

Cash value is the amount of money that an insurance policy is worth at a specific point in time, often referenced in relation to life insurance policies. Many life insurance policies include investment components that can contribute to an increase in their cash value over time.

Insuranceopedia Explains Cash Value

Sometimes, life insurance policies are canceled before the policyholder’s death and before the death benefit is paid. In these cases, the policyholder can receive the cash value of the policy. If the policy has been in effect for many years and the investments have performed well, it may accumulate a substantial amount of cash value. However, if the investments perform poorly, the cash value of a life insurance policy can be significantly reduced.