What is the cash value of a life insurance policy?

The cash value of a life insurance policy refers to the accumulated savings component of certain types of permanent life insurance policies, such as whole life or universal life insurance. It represents the amount of money that policyholders can access during their lifetime, should they need it for various purposes. The cash value grows over time as a portion of each premium payment goes towards funding it, earning interest or investment returns. Policyholders can borrow against the cash value, use it to pay premiums, or even surrender the policy for a lump sum. The specific calculation and availability of cash value depend on the policy's terms, premiums paid, length of coverage, and any outstanding loans or withdrawals.