Do whole life policies have a cash value?

Whole life policies indeed have a cash value component, which differentiates them from term life policies. The cash value is a savings component that grows over time, typically at a guaranteed rate, providing policyholders with a financial asset they can draw upon if needed.

In addition to accumulating cash value, many whole life policies offer non-forfeiture options, which are provisions that allow policyholders to access the cash value if they decide to cancel the policy or stop paying premiums. These options can include taking the cash value as a lump sum, using it to purchase reduced paid-up insurance, or converting it into extended term insurance, thus providing policyholders with flexibility and security.

This combination of cash value accumulation and non-forfeiture options is a significant advantage of whole life policies, as it provides both death benefit protection and a savings mechanism, which supports long-term financial planning.