Does A Life Insurance Policy Earn Interest? 
A term life insurance policy does not earn interest , either in the cash value or face amount . It does not earn interest on the cash value because there is no cash value in term life . The death benefit is exactly what you purchased , and does not grow due to interest earned . Permanent insurance does earn interest . However , it is not as simple as putting money in a savings account and having the cash grow by a certain percent . A current illustration will show how your premium is applied to the costs in your policy , and how much it will grow at the stated interest rate . 