How Does Life Insurance Build Cash Value? 
The Cash Value or ` CV ' of whole life insurance works a little differently among the various providers , but basically the premiums paid by clients goes into a General Fund owned by the Insurance company , -LRB- Provider -RRB- . A large portion of that General Fund is invested in a wide range of investment products . The resulting profits are what produce the CV of your policy . Of course the amount paid into your CV is dependent on the Face Value , -LRB- death benefit -RRB- , and the amount of premium you pay . -LRB- You can pay more than the minimum required premium -RRB- . And your CV return is in the form of a guaranteed interest amount . In the case of Mutual -LRB- as opposed to Stock -RRB- companies , clients also receive dividends , which may be paid into the CV of the policy , or you may elect to receive it as annual cash payments . 