It's What Happens the day after you buy life insurance that matters most


Without your income, how will your family pay the bills? You may see life insurance as an expense: financial protection for your family at the cost of premiums paid. 

What you may be missing is that a form of life insurance, called cash value life insurance, can be part of a diversified financial portfolio. It provides valuable protection against premature death now, and the opportunity to build a source of tax-free1 supplemental income later. 

With cash value life insurance, you can combine tax-free2 death benefit protection with the ability to accumulate cash value potential on a tax deferred basis. You may later access the available cash value tax-free1 via policy loans and withdrawals.

Life Insurance. Complex. Powerful. Tax-Advantaged. Get to Know What It Can Do for You and Your Loved Ones.

Term or Cash Value Life Insurance?

Both provide your loved ones with life insurance protection. Like the dilemma of renting versus buying a house, choosing between term life insurance and cash value life insurance is not always a clear-cut decision. Here is something to consider to help you decide which type of policy to buy.

Term life insurance premiums are generally more affordable during the level premium period, which can be a budget-friendly way to provide death benefit coverage for the period you need. However, term life insurance can be the more costly option in the long-run for those who need longer term protection, because premiums can substantially increase after the level premium period.

Cash value life insurance premiums are generally higher and go towards providing death benefit protection for up to the insured's lifetime plus the potential for cash value accumulation.

CASH VALUE LIFE INSURANCE Frequently Asked Questions

How does cash value life insurance work? Glad you asked. While cash value life insurance can be complex, the core concepts are easy to understand. Explore our frequently asked questions (FAQs).

Explore FAQs

Explore Our Products

Indexed Universal Life Insurance

Type of cash value life insurance that provides death benefit protection and index-based cash value growth potential with guaranteed protection from index-based losses.

  • Flexible premiums with index-based interest crediting potential
  • Guaranteed minimum interest crediting rates
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Variable Universal Life Insurance

Type of cash value life insurance that provides death benefit protection and direct market-driven cash value potential.

  • Flexible premiums and a wide range of variable investment options
  • Plus, options with guaranteed minimum interest crediting rates
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Universal Life Insurance

Type of cash value life insurance that provides death benefit protection and flexible premiums.

  • Current interest crediting rates
  • Guaranteed minimum interest crediting rates
Learn More
Term Life Insurance

Provides death benefit protection typically intended for a specified period of time.

  • Protection for a specified term
  • Fixed premiums during the specified term
Learn More

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In order to sell life insurance, a financial professional must be a properly licensed and appointed life insurance producer.

1 For federal income tax purposes, tax-free income assumes, among other things: (1) withdrawals do not exceed tax basis (generally, premiums paid less prior withdrawals); (2) policy remains in force until death (any outstanding policy debt at time of lapse or surrender that exceeds the tax basis will be subject to tax); (3) withdrawals taken during the first 15 policy years do not cause, occur at the time of, or during the two years prior to, any reduction in benefits; and (4) the policy does not become a modified endowment contract. See IRC Sec. 72, 7702(f)(7)(B), 7702A. Any policy withdrawals, loans, and loan interest will reduce policy values and may reduce benefits.

2 For federal income tax purposes, life insurance death benefits generally pay income tax-free to beneficiaries pursuant to IRC Sec. 101(a)(1). In certain situations, however, life insurance death benefits may be partially or wholly taxable. Situations include, but are not limited to: the transfer of a life insurance policy for valuable consideration unless the transfer qualifies for an exception under IRC Sec. 101(a)(2)(i.e. the transfer-for-value rule); arrangements that lack an insurable interest based on state law; and an employer-owned policy unless the policy qualifies for an exception under IRC Sec. 101(j).

Pacific Life reserves the right to change or modify any non-guaranteed or current elements. The right to modify these elements is not limited to a specific time or reason.

Variable, Indexed, and Universal Life Insurance generally requires additional premium payments after the initial premium. If either no premiums are paid, or subsequent premiums are insufficient to continue coverage, it is possible that coverage will expire.

Indexed Universal Life Insurance does not directly participate in any stock or equity investment.

Life insurance is subject to underwriting and approval of the application and will incur monthly policy charges.

Pacific Life is a product provider. It is not a fiduciary and therefore does not give advice or make recommendations regarding insurance or investment products.

You should carefully consider a variable life insurance product’s risks, charges, limitations, and expenses, as well as the risks, charges, expenses and investment goals/objectives of the underlying investment options. This and other information about Pacific Life insurance products are provided in the applicable product and underlying fund prospectuses. These prospectuses are available from your life insurance producer or at Read them carefully before investing or sending money.

Pacific Life, its affiliates, their distributors and respective representatives do not provide tax, accounting or legal advice. Any taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor or attorney.

Pacific Life refers to Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company. Insurance products can be issued in all states, except New York, by Pacific Life Insurance Company or Pacific Life & Annuity Company. In New York, insurance products are only issued by Pacific Life & Annuity Company. Product/material availability and features may vary by state. Each insurance company is solely responsible for the financial obligations accruing under the products it issues. Variable insurance products and shares of Pacific Select Fund are distributed by Pacific Select Distributors, LLC (member FINRA and SIPC), a subsidiary of Pacific Life Insurance Company and an affiliate of Pacific Life & Annuity Company, and are available through licensed third party broker-dealers. Insurance products and their guarantees, including optional benefits and any crediting rates, are backed by the financial strength and claims-paying ability of the issuing insurance company, but they do not protect the value of the variable investment options. Look to the strength of the life insurance company with regard to such guarantees as these guarantees are not backed by the broker-dealer, insurance agency, or their affiliates from which products are purchased. Neither these entities nor their representatives make any representation or assurance regarding the claims-paying ability of the life insurance company.

The home office for Pacific Life & Annuity Company is located in Phoenix, Arizona. The home office for Pacific Life Insurance Company is located in Omaha, Nebraska.


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