Cash value can be displayed as an asset on the client's Asset-Map. It becomes a valuable point of conversation for current use and future planning.
Definition of Life Insurance Cash Value
Life insurance cash value refers to the savings component found in permanent life insurance policies, such as whole life or universal life insurance. This cash value grows over time, influenced by factors like premiums paid and interest rates set by the insurance company.
Growth of Cash Value
Premium Payments: Part of the premium goes toward building the cash value.
Interest Accumulation: The cash value earns interest, which can enhance its total value over time.
Update the cash value in the Cash Value field on the policy's information page.
Make it appear on the client's map by assigning the Policy Owner(s). Note: the Cash Value will not appear on the map unless a policy owner is assigned.
How Cash Value Can Be Used
Life insurance cash value can be utilized in several ways:
1. Borrowing Against the Cash Value
Policyholders can borrow money using their cash value as collateral.
Loans must be paid back with interest; otherwise, the outstanding amount will be deducted from the death benefit.
Visualize a loan against the cash value by using a Liability financial and linking it to the policy's cash value financial.
2. Withdrawal
You can withdraw a portion of your cash value.
Withdrawals may reduce the death benefit and could have tax implications.
3. Surrendering the Policy
You can surrender your policy for its total cash value.
This option means you will lose the death benefit and may face surrender charges.
The Surrender Value field may be used but is not calculated. It is for documentation purposes only.
4. Premium Payments
Cash value can be used to pay future premiums, making it easier to maintain coverage without regular out-of-pocket expenses.
Premium payments are not calculated within Asset-Map. They may be documented on the Details page of the policy.
5. Investing
Some policies offer options to invest the cash value in various financial products, potentially increasing growth.
6. Supplemental Retirement Income
Cash value can serve as an income source during retirement when withdrawn or borrowed against.
A Cash Value is reflected on a Target-Map's™ What you Have page as an asset within the Assets Available section:
Note: in a Target-Map, the cash value is as of today's client age. Applying the Cash Value (checking the check box) assumes the value will be growing at the desired rate of return from the age listed. To utilize CV as a future asset during retirement, create a new asset using the Add Asset tool and the future value check box.
11/2025