can cash value ever exceed face value?

UPDATED: Apr 26, 2017

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UPDATED: Apr 26, 2017Fact Checked

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Asked April 26, 2017

1 Answer


This is a very good question and has a host of answers depending on the policy and circumstances. With many whole life insurance policies, your beneficiaries do not receive the actual cash value when you die; they receive the face value indicated on the death benefit. There are other options with insurers that offer universal life insurance policies that pay out the death benefit plus the additional cash value or the death benefit plus return of premium upon your death. When looking at investment options these types of policies are far less come and keep in mind a term life insurance policy won't have a cash value.

The solid answer is yes, your cash value can exceed the face value with a long term investment. Having a cash value exceed your death benefit can happen, but it normally takes a long time. It can take 12 to 15 years on a typical whole life insurance policy or upwards of 20 years on universal life insurance, this varies depending on how much premium you've paid in, according to the Society of Actuaries. There is an accumulation of wealth in these types of policies but it isn't for the short term even if excess premiums are sent it could take some time for the cash value to surpass the face value.

Answered May 1, 2017 by insdad

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