What Does Liquidity Mean In Life Insurance? 
Liquidity is a term that references the cash value in a life insurance policy.It is the policy holders ability to access the cash values that have grown within the policy . Depending on the structure of the life insurance policy one may have restrictions , and or penalties that limit the liquidity -LRB- or their access to their funds -RRB- . Insurance companies are also required to maintain suitable `` reserves '' that enable them to readily access enough liquid funds to pay out on their policy holders possible claims . 