Cash value life insurance accumulates savings.Through cash value life insurance, millions of individual life insurance policyholders have accumulated savings while providing financial protection for their families and businesses. Life Insurance Companies pool the savings portion of a cash value life insurance policy, which in turn is brought back into the general financial economy in the form of investments.

Cash value life insurance is one of the largest thrift institutions in America. Other thrift institutions that parallel cash value life insurance are; savings and loan associations, savings banks, and commercial banks. The savings element of a cash value life insurance policy is present in insured pension plans and some group cash value life insurance. However, most of the savings of cash value policies are accumulated in individually owned cash value policies.

Cash value life insurance premiums are higher at the beginning than they would be for the same amount of term life insurance. The part of the premium of a cash value life insurance that is not used for the cost of insurance and expenses is invested by the company and builds up a cash value that may be used in a variety of ways. You may borrow against the life insurance policy's cash value by taking a policy loan from the cash value.

You can also use your cash value life insurance to increase your income in retirement or to help pay for needs such as a child's tuition without canceling the life insurance policy. However, to build up this cash value, you must pay higher premiums in the earlier years of this type of life insurance policy. Cash value life insurance may be one of several types: whole life, universal life and variable life. All of these are types of cash value life insurance.