Net cash value is the amount of cash value left in your permanent life insurance policy after deducting fees and expenses. This net cash value amount also includes an adjustment for surrender charges in the event that you borrow or withdraw money from your policy prior to the end of the surrender period listed in the policy contract.
Establishing a net cash value prevents you from borrowing or withdrawing too much money in the early years of the policy. This, in turn, ensures that your policy functions as a long-term contract and that the life insurance stays in force.
Net cash values are often far less than the premiums that you pay in the early years of the policy. This can make your policy initially seem like a contract in which you pay substantial premiums but have nothing to show for it.
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You should understand that a life insurance policy is a long-term contract. The net cash value allows the insurance company to provide the insurance protection that you want. While the net cash value may be low in the early years of the policy, it typically will equal and exceed the premiums that you've paid over time.