Definition - What does Accumulated Value mean?
Accumulated value refers to the sum of the portion of the payment deducted from a policy that is set aside and invested by the insurance company and the interest that the investment has yielded. It is not tax-deductible.
Insuranceopedia explains Accumulated Value
An insurance policy is not just always meant for a risk or a benefit. Sometimes, part of the premium is invested to earn interest. The payment earmarked for investment is the accumulated value or the cash value.
A policyholder can use this value in many ways. It can be borrowed by the policyholder. It can also be used to pay for a premium. It can even be used as a way of increasing coverage such as raising the amount of a death benefit.
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