Can A Term Life Insurance Policy Have A Cash Value? 
Term insurance can build a `` terminal reserve '' and it is a cash value but it is not available to the policy owner as cash . Return of premium features aside , term insurance does n't otherwise generate `` cash value . '' The reason a `` terminal reserve '' develops is that in early years of the policy life the premium is in excess of the true risk charge and the policy banks the excess premium for later years when the premium collected is less than needed to pay the risk cost . Annual Renewable Term -LRB- ART -RRB- was priced for each year . 20 year level term averages the 20 years of premium charges into an average annual premium -LRB- level premium -RRB- . The averaging of premium is why a terminal reserve develops . 