Who benefits from the cash value component of a whole life insurance policy?

The cash value component of a whole life insurance policy is a savings element that builds over time and can be accessed by the policyholder during their lifetime. When a policyholder decides to surrender the policy, they receive the accumulated cash value, which is a key benefit of having a whole life insurance policy. This cash value grows typically on a tax-deferred basis and can be a source of funds for various needs, such as emergencies, loans, or retirement funding.

While the beneficiary does receive the death benefit upon the insured's death, that benefit is separate from the cash value. The insurance company does benefit from the premiums paid and manages the funds, but it does not directly benefit from the cash value itself in the context of the policyholder's access. Claiming that no one benefits from the cash value is inaccurate, as a crucial part of whole life insurance is precisely that the policyholder has a direct financial interest in that cash value over time.