Cash Value Life Insurance

  • Cash value life insurance can operate as an investment vehicle that combines life insurance protection with a financial instrument that operates similarly to bank certificates of deposit and mutual fund investments.

2010 - CRS - Senate Committee Print 109-72 - Tax Expenditures Compendium of Background Material on Individual Provisions 109th Congress (2005-2006) - 1002p

32 Cash value life insurance includes a variety of life insurance products including "whole" life insurance, single premium life insurance, universal life insurance, and variable life insurance.

  • Although there are important differences among these life insurance products, the economic significance of the cash values is the same for these types of policies.

33 See K. Black & H. Skipper, note 8, at 355-64.

  • Cash value is also called the surrender value of the contract.
  • Upon the surrender of a policy, the life insurance company must pay to the policyholder an amount no less than the minimum amount mandated under the applicable nonforfeiture law.
  • The cash value, however, may exceed these mandated minimums. Id. at 362.

1988 - LR - Reflections on the Meaning of Life: An Analysis of Section 7702 and the Taxation of Cash Value Life Insurance, Andrew Pike - 98p

  • Cash value life insurance may also be divided between
    • nonvariable and variable contracts and between
    • traditional and universal life contracts.

--  Dennis E. Ross, Deputy Assistant Secretary for Tax Policy, U.S. Department of the Treasury

1988 0315 - GOV (House) - Investment Uses of Life Insurance - [PDF-257p-GooglePlay