High Cash Value Life Insurance Policy

High cash value life insurance helps you build a supplemental retirement income. This kind of insurance emphasizes cash value growth over death benefit protection.

Benefits

High cash value life insurance offers strong cash value accumulation for retirement income. It may offer guaranteed cash values in the case of whole life insurance, or it may offer non-guaranteed cash values in the case of universal life.

Drawbacks

Premiums are extremely high and interest rates may be lower than other investments. Your cash value may build up quickly, but you must still expect to hold the insurance policy for 15 to 20 years before you see significant growth in the policy over the premiums you've paid in.

Considerations

Make sure that you are willing to save money for a long period of time. High cash value policies build cash value more rapidly than other forms of cash value insurance, but it still takes time for the policy's cash values to accumulate to a significant amount.

References

• "Practicing Financial Planning for Professionals (Practitioners' Edition), 10th Edition"; Sid Mittra, Anandi P. Sahu, Robert A Crane; 2007
• "Ernst & Young's Personal Financial Planning Guide, 5th Edition"; Martin Nissenbaum, Barbara J. Raasch, Charles L. Ratner; 2004
• "Life Insurance"; Kenneth Black, Jr., Harold D. Skipper, Jr.; Prentice-Hall Inc.; 1994