The capital or equity value of a life insurance policy, which is equal to the net present value of the current net death benefit. The cash value represents money set aside to pay for the future death benefit of the policy, and is also the current surrender value of the life insurance policy if the policyholder were to lapse or surrender the policy to the insurance company. Cash value also serves as collateral for policy loans. Whole life insurance and some types of universal life insurance have cash value. Term policies generally do not have a cash value.
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