Cash Value / Retirement Income from Life Insurance

Some permanent universal life and whole life policies are designed to accumulate significant amounts of cash value, in addition to their death benefit. The cash value in these policies can be used several different ways.

Death Benefit: The cash value can be added to the face amount of the policy as a death benefit in an "increasing death benefit" policy. Also, where the cash value accumulates to the point its value gets close to the face amount in a "level death benefit" policy the face amount will increase.
Premium Payments: Cash value in a policy can be used to make premium payments. Depending on the policy design and the amount of cash value it is possible for these premium payments to be sustained for the life of the policy requiring no further premium contributions from the insured.
Retirement Income: Money can be taken from the cash value account of a permanent insurance policy in the form of policy loans. Because this form of cash value distribution is considered a loan against a tax free death benefit, the distribution is also tax free.*

* Always consult a qualified and licensed tax professional for tax advice. Certain restrictions and conditions may apply.

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