The premium amount is fixed throughout the life of the policy and is due in regular intervals. The payment, though, tends to be higher than the premiums associated with term policies. Part of the premium pays for the death benefit coverage, commissions and fees. The rest is invested in the insurance company's investment portfolio. This investment is called the cash value of the policy.
Cash value accumulates on a tax-deferred basis until withdrawal or lapse of the policy.
The cash value provides a guaranteed minimum rate of return. It is pure life insurance. It does not accumulate in value. If you die within the designated time frame, your beneficiary will receive the death benefit amount. It is the least expensive form of life insurance.