Dictionary Home »
Invest » cash-value life insurance
cash-value life insurance investment & finance definition
A life insurance policy that combines life insurance
with the features of a savings and investment account. The gains from the
investments accumulate tax-deferred and the cash value of the policy can be
borrowed against. A cash-value life insurance policy pays a death benefit to
the named beneficiaries when the policyholder dies. The three primary types of
cash-value life insurance are
A whole life insurance policy, which lets the cash value of the policy accumulate depending on the return of the life insurance company’s investments in stocks, bonds, and other financial instruments.
A variable life policy, which lets the policyholder choose the investments for the life insurance policy, selecting from a variety of mutual fund or other investment options.
A universal life policy, which lets investors choose their investments among money market and Treasury securities; universal life policies were widely popular during the 1980s, when interest rates were high, but are less popular today.
See cash-value life insurance in Wall Street Words
Learn more about cash-value life insurance