Much like a savings account, a universal life insurance policy can accumulate cash value. In a universal life insurance policy, the cash value earns interest based on the current market or minimum interest rate, whichever is greater. As cash value accumulates, policyholders may access a portion of the cash value without affecting the guaranteed death benefit. A policyholder will pay taxes on any withdrawals they make from the excess cash value of the universal life insurance plan. Also, depending on when the policy and premium payments are made, earnings will be available as either last-in-first-out (LIFO) or first-in-first-out (FIFO) funds. Upon the death of the insured, the insurance company will retain any remaining cash value. Beneficiaries will receive only the policy’s death benefit.