The cash value of a life insurance policy depends on the type of policy you have purchased, how long you have had the policy, how much you’ve paid in premiums and the performance of the policy’s investments.
In general, the cash value of a $25,000 life insurance policy is determined by looking at the policy type, the time period for which the policy has been held, and the performance of the policy-related investments.
There are several types of life insurance policies available and each type offers different features that impact the cash value of the policy.
Type of Life Insurance Policies
• Whole Life Insurance: This is a permanent life insurance policy that provides life-long coverage as long as the premiums are paid. The premiums on this type of policy stay level throughout the life of the policy and builds up cash value that you can borrow against. The cash value is based on the investments you choose within the policy and grows over time.
• Universal Life Insurance: This type of policy offers flexibility in the amount of premium payments and the death benefit. The policy builds up a cash value that you can use as you wish.
• Term Life Insurance: Instead of having a cash value, this type of policy only offers death benefit protection.
Performance of the Policy-related Investments
The performance of the policy-related investments determine the cash value of a life insurance policy. Investments such as bonds, stocks, mutual funds, savings accounts, etc are tied to the policy and determine the cash value of your life insurance policy.
How Much Is the Cash Value of a $25000 Life Insurance Policy?
The cash value of a $25,000 life insurance policy can vary greatly depending on the type of policy and the performance of your policy’s investments. Generally, the cash value of this type of policy will range between $2,500 and $15,000.
It is important to note, however, that the cash value of a life insurance policy cannot be determined until the policy has been in effect for a certain period of time. If you’re looking to find out the cash value of your life insurance policy, it’s best to contact an insurance company to discuss your policy.
For more information about how life insurance policies work and how the cash value of a policy is determined, you can read this helpful article: https://www.policygenius.com/life-insurance/what-is-the-cash-value-of-life-insurance/