In fact, many policies are sold based on the concept of
accumulating cash value rather than guaranteed death benefit.
Not exact matches
Rather, the policy acts as a forced savings plan that
accumulates money in a tax deferred account that you can THEN use to invest with, as you purchase other income producing assets, at the same time as earning interest and dividends on the
cash value in your policy!
While permanent life insurance policies have a
cash -
value component that
accumulates savings and can be invested, you'll have the greatest control over your money and the potential to earn the highest returns if you invest it yourself, through the brokerage of your choosing,
rather than through a life insurance policy.
As your
cash value accumulates and earns tax - free interest, your policy becomes an asset
rather than a liability.
In this case, you may have requested a loan based upon the face
value of the policy
rather than the
accumulating cash value.
No load life insurance allows your
cash value to
accumulate faster than a traditional whole life policy would, since more of your premiums are going towards that
cash value rather than paying into commission.
The benefits of permanent life insurance are that you will not have to worry about your coverage ever running out, you will be
accumulating a
rather impressive «
cash value» that you can access even before you die, and the policy itself is treated as a financial asset that can potentially be sold later in life.