Will my beneficiaries receive the cash value?

23 Dec 2025 · 2 min

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1:56

Jayson Lowe explains that for dividend-paying (participating) whole life insurance, the policy's cash value is the net present value of the future death benefit, not a separate pool of money that beneficiaries automatically receive. He contrasts participating whole life with universal life, notes that contract guarantees make total cash value match total death benefit only at advanced ages (Canada: age 100; US: age 121), and emphasizes beneficiaries receive the higher death benefit at death. The clip ends with a plug for the book "Cash Follows the Leader" (co-authored with Richard Canfield).

Questions this video answers

Canada: age 100; United States: age 121.

Jayson Lowe and Richard Canfield; the book is titled "Cash Follows the Leader."

Chapters

So high cash value may sound really good to you, and you may be asking yourself, do my beneficiaries receive the cash value? Here's where the industry has caused some confusion. What's important to understand is that cash value. And I'm addressing a dividend paying, participating whole life insurance policy. I'm not talking about universal life insurance, which is essentially term life insurance with a cash account or an investment account associated with it. I'm talking about dividend paying whole life insurance. The cash value in that contract is not money. It is the net present value of the future payment of a death benefit. I'll say that one more time. It is the net present value of the future payment of a death benefit. And if you understand that the total cash value is contractually guaranteed to match the total death benefit by age 100 of the life insured in Canada and age 121 of the life insured in the United States, and you understand that the death benefit of this insurance contract is going to be ever increasing with no future increase in premium, then you'll understand that the death benefit will always be larger than the total cash value because they don't match until the ages that I just described. So when the life insured dies, we want the beneficiaries to receive the higher number. And the higher number is, is the total death benefit. And the cash value at the time of death represents the net present value of the future payment of a death benefit. And that death benefit will always be higher. Podcast co host and I, Richard Canfield, we wrote the book titled Cash Follows the Leader. Cash Follows the Leader. So if you head on over to Amazon, you'll be able to type in Cash Follows the Leader. Get your hands on a copy of that book and we'll take a deeper dive into what I've described in this short video.