What can the policy owner do with the cash value of a whole life insurance policy while it is in effect?

The cash value of a whole life insurance policy is an integral feature that provides policyowners with valuable financial flexibility while the policy is in effect. This cash value accumulates over time as the policyholder makes premium payments.

Borrowing against the cash value allows the policyowner to access funds without needing to surrender the policy. This is particularly advantageous for those who may need cash for emergencies, opportunities, or other financial needs while retaining life insurance coverage. If the policyholder chooses not to repay the loan, any outstanding balance will be deducted from the death benefit upon the policyholder's passing.

Additionally, the cash value can also be received by the policyowner upon surrendering the policy altogether. This feature can provide a strategic option for policyholders who no longer need insurance coverage but want to retrieve some of the value accumulated over the years.

The other options, while they may seem appealing, do not accurately reflect standard practices associated with whole life policies. For instance, investing cash value in the stock market is not a typical feature of whole life policies since the cash value is generally managed by the insurer, following a more conservative investment strategy. Transferring cash value to another insurance company is also not a standard action available to policyowners. Lastly, while it is