Whose cash value does a life insurance policy belong to?

The cash value of a life insurance policy belongs to the insured, which means that the individual who owns the policy has the right to access and utilize this cash value during their lifetime. The cash value accumulates as the policyholder pays premiums, and it grows over time, often on a tax-deferred basis. This accumulation can be used for various purposes, including taking loans against the policy, withdrawing funds for emergencies, or even using it to pay premiums.

In this context, it is important to recognize that while the beneficiary receives the death benefit upon the insured's passing, they do not have any claim to the cash value while the insured is still alive. The insurer manages the policy and the accumulation of cash value, but the ownership and rights remain with the insured.

The estate does not have a claim to the cash value unless the insured passes away and the policy is paid out to the estate, which typically occurs only if there is no designated beneficiary. Therefore, understanding that the insured has ownership over the cash value emphasizes their control over the financial aspects of their life insurance policy while alive.