<P> The over-payments inherent in the level premium system mean that a large portion of expensive old - age costs are prepaid during a person's younger years . U.S. Life insurance companies are required by state regulation to set up reserve funds to account for said over-payments, which represent promised future benefits, and are classified as Legal Reserve Life Insurance Companies . The Death Benefit promised by the contract is a fixed obligation calculated to be payable at the end of life expectancy, which may be 50 years or more in the future . (see non-forfeiture values) </P> <P> Most of the visible and apparent wealth of Life Insurance companies is due to the enormous assets (reserves) they hold to stand behind future liabilities . In fact, reserves are classified as a liability, since they represent obligations to policyholders . These reserves are primarily invested in bonds and other debt instruments, and are thus a major source of financing for government and private industry . </P> <P> Cash values are an integral part of a whole life policy, and reflect the reserves necessary to assure payment of the guaranteed death benefit . Thus, "cash surrender" (and "loan") values arise from the policyholder's rights to quit the contract and reclaim a share of the reserve fund attributable to his policy . (see #Example of non-forfeiture values below) </P> <P> Although life insurance is often sold with a view toward the "living benefits" (accumulated cash and dividend values), this feature is a byproduct of the level premium nature of the contract . The original intent was not to "sugar coat" the product; rather it is a necessary part of the design . However, prospective purchasers are often more motivated by the thought of being able to "count my money in the future ." Policies purchased at younger ages will usually have guaranteed cash values greater than the sum of all premiums paid after a number of years . Sales tactics frequently appeal to this self - interest (sometimes called "the greed motive"). It is a reflection of human behavior that people are often more willing to talk about money for their own future than to discuss provisions for the family in case of premature death (the "fear motive"). On the other hand, many policies purchased due to selfish motives will become vital family resources later in a time of need . </P>

Does whole life insurance have cash surrender value