Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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Understanding the difference between life insurance cash value and face amount is very important because they are very different.

Face amount is the value of the policy to your beneficiaries or the amount that it will be worth upon your death (i.e. face amount is also known as the death benefit). Cash value is the savings or investment amount attached to certain types of life insurance.

It accumulates based on premiums and interest. You can withdraw and use this money while you are alive.

Read on to learn more and then be sure to enter your zip in to compare free life insurance rates now!

Life Insurance Policies With Cash Value

Permanent or whole life insurance policies are the ones with cash value or a portion that acts as an investment. In fact, such policies are often referred to as cash value life insurance. You are insured for death benefits the same way a term life policy insures you.

However, if you decide at some point that you no longer need life insurance, you can simply surrender the policy and take the cash value of it instead. With term insurance you do not get money back if you stop the policy. In fact, if you do not die within the term of your policy you have nothing to show for it.

The other benefit of life insurance policies are the flexibility they offer when you need money. You can borrow against your policy and repay it up to an amount known as the surrender value. This is simply the cash value of the policy minus surrender charges the insurance company places on the amount, to cover its expenses.

When you borrow against your policy, you keep the policy active and pay premiums. You should also pay back the loan plus interest so that the amount is not removed from future cash value or death benefit. Alternatively you can use your policy as collateral to assign to a lender in exchange for a loan.

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When it is a Good Idea to Opt for Cash Value Life Insurance

There are a variety of benefits to choosing a cash value life insurance policy. You will get tax breaks from such a policy. The interest that accumulates on such life insurance policies does so tax free, making it an attractive investment option. You can get access to the cash value of your policy at any time and there are no penalties involved. This is rare in the world of investments.

While it is true that premiums on cash value policies are higher than on term life policies, for many people it is a good option. The return on investment and the flexibility of cash value life insurance policies are worth the extra premium.

However, if your budget does not permit the cost of such premiums, opt instead for a term life policy that has the option to convert to permanent life insurance later.

Finding the Best Life Insurance For You

If you are in the market for cash value life insurance or another type of life insurance coverage, the best way to find a policy that meets your needs is by using an online quote tool to shop around. These free quote tools ask you the same questions that any insurance company would ask if you were shopping around for quotes. However, they submit your information to a variety of companies at once, so you get multiple personalized quotes from companies that offer the type of coverage that you are looking for.

Because these quotes are based on the same information, you will find that it is easy to compare and contrast them in order to get the best deal. However, shopping around for the best coverage does not end with getting quotes. You should also learn as much as possible about the insurer you are planning to do business with. Life insurance is a long term commitment in most cases. You want to deal with a company that gives good customer service both while you are paying premiums and when your beneficiaries are getting paid. You also want a company that is solid financially, so they will be still around and able to pay claims upon your death.

In order to get the information to check on such details, take the time to check the insurer’s score with one of the independent insurance ratings companies, such as A.M. Best, Moody’s or Standard & Poor’s. They assign letter grades that indicate the current financial stability of an insurer and their economic outlook for the future. Lean towards companies with an A or better rating for life insurance. Do an online search for information about the customer service record of the insurer to find out how they treat their customers. Get personal recommendations also if possible.

Get started today searching for the cash value life insurance policy for you by putting our online insurance quote tool to work. Just enter your zip code and you can start comparing life insurance quotes for many different types of life insurance!