Cash Value

Cash value is the living benefit of a whole life insurance policy — the amount that has accumulated inside the policy and is accessible to you while you are alive.

Cash value grows in two ways: through guaranteed growth specified in the policy contract, and through dividends paid by the carrier when the company performs well. On participating policies issued by mutual companies, both components contribute to the total.

In whole life banking, cash value functions as the warehouse of your banking system. Rather than withdrawing cash value (which would reduce it), practitioners take policy loans that use the cash value as collateral. The cash value continues to grow uninterrupted even while a loan is outstanding against it.

In Policy Stack, cash value is entered from your annual statement or carrier illustration as a Snapshot. The value displayed on your dashboard reflects the most recently recorded snapshot. All cash value figures are encrypted at rest.

Related terms: Net Cash Value, Policy Loan, Snapshot, Uninterrupted Compounding