How Does Whole Life Insurance Build Cash Value? 
Whole life insurance builds cash value through the payment of premiums . With permanent insurance programs -LRB- universal life included -RRB- , the carrier has a cost of insurance charge -LRB- a.k.a. mortality and expense charges -RRB- that is taken out of the premium . The net amount remaining gets added to the cash value total -LRB- if the premium is less than the cost of insurance charge , then the cash value total would decrease -RRB- . You can borrow from the cash value , but it would create a loan against the policy and , like a bank loan , features an interest rate while the loan is outstanding - the funds are expected to be paid back . When a claim is made on the policy -LRB- the insured dies -RRB- , the carrier takes back the cash value and pays out the death benefit -LRB- less any outstanding loans and interest against the policy -RRB- . Make sure to discuss what will happen to the policy before doing anything with the cash value including borrowing from it and terminating the policy to get the cash value . I hope the information is helpful - please feel free to contact me for help with your program and if you have any questions . Thanks very much . 