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Cash Value Policy

A Cash Value Policy is a category of life insurance including whole life, universal life and variable universal life that combines the death benefit with a savings component. The insurance policy is broken down into two parts: the mortality charge (the part that pays for the death benefit) and a reserve (the savings component that earns interest). As you get older, the cost of the death benefit rises. In addition to interest, the reserve might receive an annual dividend, depending on how many policies have been paid out and how well the insurer has invested the premiums it has received.
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See Also

Interest
Reserve

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