Part of your premium pays for insurance coverage and administrative fees, and part goes into a cash value account, which grows tax deferred. The longer you pay your premiums, the larger it has the potential to grow. If you die when the policy is in force, your beneficiary receives the death benefit, or face value of the policy, which includes the balance in your cash value account. USING YOUR CASH VALUE – There may be times when you can borrow against the cash value, some- thing you can’t do with a traditional term policy. Interest rates on cash value loans are generally lower than the rates available on other loans. However, the loan you can take is limited to a percentage of the account value. Even more important, any amount you’ve borrowed and haven’t repaid at the time of your death, plus the interest due, is subtracted from the face value and reduces the amount your beneficiaries will receive. Since your primary goal in buying the insurance to begin with is protecting your loved ones, you may want to borrow against that protection only
as a last resort. Whole life insurance is the oldest and most straightforward type of permanent life   Read more…