Whole Life Insurance: Death Benefit Or Cash Value?

Whole life insurance policies offer this nifty little perkearly, the policy owner no longer has that whole life
called "cash value." A whole life insurance policy willinsurance policy.
accumulate a cash value over time, and the cash isThe second way a whole life insurance policy owner
tax-deferred, which means you will not have to paycan obtain his cash value is by borrowing against the
taxes on the cash value your whole life insurancecash value. This is definitely a benefit in times of
policy accumulates. Many people enjoy the cash valuefinancial stress, but unless the policy holder pays back
perk that whole life insurance policies offer; however, itthe amount borrowed, the death benefit is reduced. So,
must be noted that you cannot both reap the rewardsshould the policy holder die before he pays back what
of your cash value and have your beneficiary receivewas borrowed against the cash value, the amount of
your death benefits.death benefits the beneficiary will receive won't be as
This probably sounds a bit confusing, so let's break itmuch as it would be if there was no money borrowed
down. Whole life insurance policy owners only get theagainst the cash value.
cash value that their policy has accumulated in one ofTo sum up, a whole life insurance policy holder can not
two ways. The first way the policy owner can obtainhave all of his cash value and still have a death benefit
his cash value is by surrendering his whole lifefor his beneficiary, nor can a policy holder borrow
insurance policy early, in which case the cash valuemoney against the cash value and still allow his
would be available to him while he is still alive. Once thebeneficiary to get the full death benefits if the money
policy owner surrenders his whole life insurance policyborrowed is never paid back.