Can You Add Money to Cash Value Life Insurance?

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Can You Add Money to Cash Value Life Insurance?

Yes, you can add money to your cash value life insurance policy. This can be done in a few ways:

Regular Premium Payments

  • Primary Method: Regular premiums contribute to the cash value.
  • Growth: A portion of your premiums grows tax-deferred over time.

Additional Premium Payments

  • Policy Provisions: Some policies allow extra payments to increase cash value.
  • Limits: There may be limits on how much extra you can pay.

Paid-Up Additions

  • What They Are: These are mini life insurance policies adding to your coverage and cash value.
  • Benefits: They increase death benefit and cash value, offering more investment growth potential.

Policy Loans

  • Borrowing: You can borrow against your cash value, but it’s not a direct addition.
  • Interest: Loans accrue interest and reduce death benefits if not repaid.

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Why Add Money?

  1. Increased Savings: Enhances the investment component of your policy.
  2. Tax Advantages: Offers tax-deferred growth of earnings.
  3. Enhanced Benefits: Can potentially increase death benefits.

Considerations Before Adding Money

  • Policy Terms: Understand your policy’s specifics about additional payments.
  • Tax Implications: Consult a tax advisor for potential consequences.
  • Financial Goals: Ensure it aligns with your long-term financial strategy.

Comparing Contribution Methods

Regular PaymentsSteady growth, easy managementLimited by policy terms
Additional PaymentsFaster growth, flexibilitySubject to limits, potential fees
Paid-Up AdditionsIncreases benefits and valueRequires extra payment
Policy LoansImmediate liquidityInterest charges, reduced benefits


Adding money to your cash value life insurance can be a strategic financial move, enhancing your policy’s value and benefits. However, it’s crucial to understand the terms and implications. Considering these aspects will help you make an informed decision that aligns with your financial goals.

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Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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