How Do I Know If My Life Insurance Has Cash Value?

You can determine whether your life insurance policy has cash value by checking the policy type and reviewing your policy statements or illustrations. Only permanent life insurance (like whole life or universal life) typically builds cash value. Term life does not accrue cash value.

Quick Answer

• Policy type matters: Permanent life insurance may have cash value; term life does not.

• Check your documents: Look for terms like “cash value,” “policy values,” or “surrender value.”

• Request an illustration: Contact your insurer for a current cash value illustration or report.

• Annual statements: Most carriers include a cash value section.

• Customer service: A quick call to your insurer can confirm if cash value exists.

Step 1 — Identify Your Policy Type

The easiest way to know if your life insurance has cash value is by looking at the type of policy:

• Term Life Insurance:

  • No cash value — designed only for death benefit protection for a fixed term (e.g., 10, 20, 30 years).

  • Cash value = $0 for term.

• Permanent Life Insurance:

  • Includes whole life, universal life (UL), indexed universal life (IUL), and variable universal life (VUL).

  • These policies can build cash value over time.

If your document doesn’t clearly say “permanent,” call the insurer or agent to confirm.

Step 2 — Review Your Annual Policy Statement

Most insurance carriers send yearly policy statements that show:

• Current cash value

• Death benefit

• Premiums paid

• Paid-up additions or dividends (if applicable)

Look for a section labeled:

• “Cash value”

• “Policy values”

• “Surrender value”

• “Accumulated value”

If one of these figures is listed, you have cash value.

Step 3 — Request a Policy Illustration

A policy illustration is a formal document that projects how the policy values will grow over time. It shows:

• Cash value accumulation by year

• Death benefit projections

• Premium schedules

• Loan values (if applicable)

You can request a current illustration from your insurer or agent at no cost.

Step 4 — Call Your Insurance Company

If you’re unsure or can’t find statements:

• Call the customer service number on your policy or insurer’s website.

• Ask for your “cash value amount” as of the latest date.

• Ask whether your policy has a surrender value — if it does, it has cash value.

Be ready with your policy number.

Step 5 — Look at Your Policy Contract

Your life insurance contract typically states in the definitions or benefits section whether it builds cash value. Search for language like:

• “Cash value”

• “Guaranteed values”

• “Surrender charges”

• “Policy value”

If you see these terms, the policy is a permanent product with potential cash accumulation.

Examples

Example 1 — Whole Life Policy
Jane checks her annual statement and sees a “cash value” line showing $15,200. She also requested an illustration projecting future cash values.

Example 2 — Term Life Policy
Mark’s declaration page shows “Level Term.” There is no cash value section, and a call to customer service confirms the cash value is $0.

How Cash Value Grows (Permanent Policies)

Cash value grows based on:

• Policy type

• Premium size and payment schedule

• Interest crediting or dividends (whole life or indexed/variable policies)

• Policy expenses and fees

Cash value growth is usually slow in early years and accelerates over time.

Can You Access Cash Value?

If your policy does have cash value, you may be able to:

• Borrow against it

• Withdraw from it

• Surrender the policy for its cash surrender value

• Use it to pay premiums

Be aware that loans and withdrawals may reduce your death benefit and could have tax implications.

FAQs (People Also Ask)

1. Does all life insurance have cash value?
No — only permanent life insurance builds cash value. Term life does not.

2. Where do I find cash value in my policy?
Check your annual statement or policy illustration under “cash value” or “policy values.”

3. Can I call the insurance company to check?
Yes — customer service can tell you whether your policy has cash value.

4. Does cash value equal surrender value?
Not always — cash surrender value may be less due to surrender charges early in the policy.

5. Can I borrow cash value?
Yes — permanent policies usually allow tax-advantaged loans against cash value.

6. Does cash value grow every year?
It typically grows each year, though growth rates vary by policy type and performance.

7. Does term life ever become cash value later?
No — term policies stay term and never build cash value.

Final Thoughts

Knowing whether your life insurance has cash value starts with identifying the policy type and reviewing your policy statement or illustration. Permanent policies build cash value; term policies do not. If you need help interpreting your policy or want to explore options that generate cash value, expert guidance can help.

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