Add to Cash Value Option

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Add to Cash Value Option

In universal life insurance, the ability to place a portion of one's premium into a cash value account, which will invest that premium and may offer a higher return for the policyholder. This additional cash becomes available upon the death of the policyholder and adds to the guaranteed death benefit that is otherwise received. Because of the existence of the add to cash value option, premiums are higher for universal life policies than for other forms of life insurance.