Unlike a term life plan, which provides only a death benefit, a cash value life insurance policy helps you build savings over time while maintaining coverage. This accumulated cash can be accessed through withdrawals, loans, or premium payments, offering financial flexibility when needed.
With different options like whole life, universal life, and variable life insurance, you can easily find a policy that suits your needs. Whether for long-term financial planning, emergency funds, or securing a legacy for loved ones, cash value in life plans provides security and benefits beyond just protection.
What is the Cash Value in Life Insurance?
Life insurance with cash value is a permanent life policy that builds savings over time. This feature is available in whole, universal, variable, and indexed life plans. A life policy has two key parts: the death benefit and the cash value.
The death benefit is the amount paid to beneficiaries. This sum is decided by you when purchasing the policy. In some cases, the cash value grows separately.
One advantage of cash value in life insurance in the UAE is early access to funds. You can withdraw money, take a loan against the policy, or surrender it for cash if needed. This flexibility makes it an appealing option for long-term financial planning
Types of Life Insurance with Cash Value in UAE
Many assume that life policies with cash value limit their options, but several permanent policies offer this feature. While term life insurance doesn’t include cash value, it can be a cost-effective choice with proper planning.
Here are a few types of life policies that include cash value:
Whole Life Insurance - This policy lasts a lifetime as long as premiums are paid. It offers a guaranteed death benefit and fixed premiums. The cash value grows steadily, providing a financial cushion over time.
Universal Life Insurance - Unlike whole life, universal life plans allow flexibility in premium payments and death benefits. The cash value can help cover premiums or other expenses when needed.
Variable Life Insurance - This plan includes investment options, meaning the cash value can grow or decline based on market performance. It’s ideal for those comfortable with investment risks.
Indexed Life Insurance - This policy links cash value growth to a stock market index. While returns vary, they usually include a minimum guaranteed interest rate for added security.
How Does Cash Value Work in Life Insurance?
Cash value life insurance, as mentioned earlier, is a type of permanent coverage that lasts a lifetime. It typically has higher premiums than term life plans as a part of the payment goes into a cash value account. This account grows over time as premiums are paid.
The cash value earns interest. As it increases, the insurer’s risk decreases since the accumulated amount helps cover part of the policy's cost. This feature makes cash value in life insurance both a protection plan and a financial asset, providing long-term security and flexibility.
Advantages of Cash Value Component in Life Insurance in UAE
Let’s take a look at the key benefits of cash value in life insurance in the UAE —
Lifelong Coverage - This type of insurance lasts a lifetime, ensuring your loved ones receive a payout no matter when you pass away
Flexible Access to Funds - Once enough cash value builds up, you can use it in your lifetime — options include taking out a loan or making a withdrawal when needed
Affordable Premiums - While premiums may be higher than term life insurance, they can still be managed within your budget
How Can You Withdraw Cash Value from Life Insurance in UAE?
One of the key benefits of cash value in life plans is the ability to access funds while still alive. The options for doing so depend on the specific policy and insurer.
Using Cash Value for Premiums - Some policies allow the cash value to be used to cover premium payments, which can be helpful during financial difficulties. However, this may reduce the death benefit over time.
Taking a Loan - Policyholders can borrow against the cash value without surrendering the plan. Unpaid loan amounts may reduce the death benefit.
Making a Withdrawal - Some insurers allow withdrawals from the cash value account. Withdrawing more than the paid-in amount may affect the death benefit.
Cash Surrender Value - Surrendering the policy can provide access to the accumulated cash value but may reduce or cancel coverage.
Where to Buy Life Insurance with Cash Value in UAE?
Buying life insurance in the UAE is fairly easy with Policybazaar.ae, where you can find the top policies from the leading providers all in one place. Instead of searching multiple websites, you can compare and choose the best plan easily.
The benefits of buying through this platform include —
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