Does the beneficiary receive both the cash value and the death benefit on a whole life insurance policy?

A beneficiary will receive only the death benefit and not the cash value of a whole life insurance policy. The cash value, otherwise known as cash reserves, is money used to reduce the amount of risk for the insurance company. Policy owners may access the cash reserves by taking out a loan against the policy. Because this cash value is a component of the whole life insurance policy, the death benefit is reduced by the loan amount. If a claim is filed against a policy that has outstanding loans, the beneficiary will be paid the death benefit amount minus any outstanding loans associated with the policy.