What is cash value?
Definition
Educational information only. Last reviewed August 25, 2026.
How it works in Canada
Cash value generally grows slowly in early policy years because premiums first cover insurance costs and expenses. Accessing it reduces the death benefit unless repaid, and withdrawals or loans exceeding the adjusted cost basis can create taxable policy gains.
Example
A policyholder borrowing against cash value keeps coverage in force but reduces the net amount payable at death until the loan is repaid.
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Written and reviewed by CanadaGFI.ca Editorial Team
Licensed insurance and financial professionals contributing to CanadaGFI.ca
Published and last reviewed August 25, 2026. Read our editorial policy and disclosures.
This page is educational information about Canadian financial concepts. It is not personalized financial, tax, insurance or legal advice, and it does not consider your individual circumstances. Product availability, eligibility, pricing and tax treatment depend on the provider, your situation and current Canadian rules. Speak with a professional licensed in your province before acting.
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