There are two principal types of life insurance: whole life and term life. Term life policies are less expensive but don’t build up a cash value. However, whole life policies can, which is an important benefit of this type of life insurance. When you need life insurance, whether it’s whole life or term life, give us a call at Westco Insurance LLC in Colorado Springs, CO.
What Is a Cash Value?
A life insurance policy’s main value is the death benefit paid to beneficiaries when the policyholder dies. However, that isn’t the only value of a whole life insurance policy. These policies also build up a cash value, which is money that the policyholder can use while they’re still alive. The cash value is an amount that builds up slowly in the policy over time. The amount can eventually become enough to help with financial difficulties if they arise. The cash value can be borrowed against and then paid back like any other loan. This can give the policyholder peace of mind because they have this amount available should they ever need it.
How Cash Value Grows
The policyholder pays the premiums regularly. Over time, the insurance company uses this amount to invest. As they make a profit on that investment, a small portion of that profit goes into the policy’s cash value. It can take years for a whole life policy to grow a substantial cash value, but this type of life insurance is a helpful benefit.
Get a Whole Life Insurance Policy
If you’re interested in helping your loved ones financially when you’re no longer here, you need life insurance. Call us at Westco Insurance LLC in Colorado Springs, CO to get started.
