What does the cash value of a life insurance policy mean?

The cash value of a life insurance policy refers to the amount of money that accumulates over time within certain types of permanent life insurance policies. This cash value is separate from the death benefit and can be accessed by the policyholder during their lifetime. It functions as a savings component, allowing the policyholder to build up funds that can be used for various purposes. The cash value grows tax-deferred and can be accessed through withdrawals, loans, or even surrendering the policy. It provides flexibility and financial security, allowing policyholders to use the funds for emergencies, education expenses, retirement income supplementation, or other financial needs. Overall, the cash value represents a valuable asset within a life insurance policy, offering both protection and potential for financial growth.