Both types of life insurance provide death benefit coverage. While term life insurance offers protection that last for a specific period of time (usually 10, 20, or 30 years), cash value life insurance offers protection that may last a lifetime. As long as the policy has enough cash value, the policy won’t lapse. Additionally, cash value life insurance policies have the potential to accumulate cash value. Because of these features, cash value life insurance generally has higher premiums.

The primary purpose of life insurance is to provide death benefit protection. But what is that? In short, when a life insurance policy’s insured person passes away, the policy’s death benefit amount is paid to the policy’s beneficiaries. This death benefit is generally paid income tax-free² and may represent a substantial financial sum to help protect your family, business, or estate from the financial impact of the insured’s death.

Cash value life insurance is different from term life insurance because it offers death benefit protection as well as the ability to accumulate cash value that can be accessed while the insured is alive. A portion of each premium payment is applied to the policy’s cash value. The cash value grows with additional premium payments and any interest the insurance company credits the policy. The cash value decreases as monthly policy charges are deducted and by any policy withdrawals, loans, or other distributions the policyowner takes from the policy.

You may take withdrawals and policy loans from the available cash value of your policy. You can use the money to supplement your income in retirement or meet any other financial need you may have. Just remember that withdrawals and policy loans will reduce your policy’s available cash value and may reduce other policy benefits as well.

Many cash value life insurance policies offer flexible premiums, which means the policyowner may choose the timing and amount of premium payments. However, if the policy’s accumulated cash value is not enough to pay ongoing monthly policy charges, the policy will enter a grace period, and if sufficient premium is not received by the end of the grace period, the policy will lapse. Upon lapse, the policyowner will lose life insurance coverage and any other benefits associated with the policy and a taxable event may occur if the policy has outstanding loan debt in excess of the policy’s cost basis (sum of premiums paid less any policy withdrawals).

Certain Pacific Life cash value life insurance policies offer optional features, called riders, that allow the policyowner to access either the policy’s death benefit or other values in the event of chronic or terminal illness. This can be a significant advantage as many Americans are most likely to need care for chronic illness late into retirement, when other sources of income may be dwindling. There are other benefits too—some riders allow you to change your death benefit amount or cash value pattern. Other riders provide guarantees to keep your policy in force regardless of cash value performance, as long as you pay at least a minimum premium on time. To learn more, talk to your life insurance producer and request a personalized illustration demonstrating the impact of various riders available with your policy.

For the most accurate depiction of your policy’s performance, refer to your policyowner statement. You may access statements, manage your policy’s allocations, request withdrawals, update beneficiaries, and sign up for eDelivery of critical policy documents easily online at