What Exactly is the CASH VALUE in your Life Insurance Policy?

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This channel was created to provide viewers with content that will help them better understand life insurance. As a licensed Life Insurance Agent, I will go over the most important, essential facts and topics in these videos.

Hello my fellow insurables I’m Kelli
Arrowsmith a licensed life insurance
agent with Arrow Final Expense in this
video we’ll go over what is cash value
and life insurance and how does it work
and stay tuned till the end when I give
you your cash value options if you’re
new to my channel you’ll get the best
tips knowledge and honest information
about life insurance please subscribe so
first and foremost in order for a life
insurance policy to have cash value
it has to be permanent life insurance
such as whole life or universal life and
I say this because term insurance which
is temporary does not have cash value so
cash value is a portion of your life
insurance policy that earns interest and
can be borrowed from or withdrawn from
while you are still alive and I will
mention that it typically takes between
two to five years for that cash value to
build up before you can use it so you
can take out a loan or borrow from the
cash value in your policy in which case
you would need to repay that loan so if
the life insurance company will add
interest to any loan balance and any
unpaid loans will be deducted from the
death benefit some other cases you may simply make a
withdrawal from your policy’s cash value
and the simple difference between a
withdrawal and a loan is that a loan
gets repaid and a withdrawal does not and just as
with any unpaid loans if you do withdraw
from your cash value it’ll be deducted
from the policy’s death benefit so a
friend of mine named Jeremy that I
worked with right out of high school
his mom Peggy had taken out life
insurance when my friend Jeremy and his
sister were little kids
and eventually she was Raising Jeremy
and his sister alone she was a single
mom and she needed a new roof on her
house
so she borrowed against her life
insurance policy and was able to get the
roof replaced so when Peggy did pass
away my friend Jeremy and his sister
only got a portion of the life insurance
policy because you know either she
hadn’t paid the loan back or she had
just simply withdrawn the money
in order to replace her roof now in some
cases you may become ill or unable to
work therefore you’re not able to pay
your life insurance premiums you can
access the cash value in your policy
to pay your premiums so that your policy
does not lapse if you do withdrawal
all of the cash value in your policy
it will cancel your policy or what is
known as that will surrender your policy
which means you no longer have life
insurance so if you do surrender your
policy you will get the amount of cash
value that is built up in the policy
minus any surrender fees
and minus any uh loans that have not
been paid back or any outstanding debt
that may be on the policy the difference
between cash value and the surrender
value is cash value is the amount that’s saved in
the policy whereas the surrender value
is the amount you will get if you cancel
or Surrender your policy minus any fees
or outstanding debt that may be on the
policy outstanding debt could be unpaid
premiums
a loan that has not been paid back or
any withdrawals you’ve made from your
cash value all right so let me go over
real quick the four ways you can access
your policies cash value number one make
a withdrawal number two take out a loan
number three surrender the policy and
pull out all the cash value minus any
surrender fees and any outstanding debt
number four if you’re unable to pay your
premiums use the cash value in your
policy okay there you have it that is a
simple overview of how cash value in a
life insurance policy works thanks for
watching till the end if you want to get
the best tips knowledge and honest
information about life insurance please
like And subscribe and I’ll see you guys
next time.

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