Cash value life insurance is one of those financial topics that instantly divides a room. Some people swear by it as a wealth tool. Others dismiss it as overpriced and unnecessary. And for many doctors, it sits in a confusing middle ground—something they’ve heard can be powerful, but not something they fully understand how to use.
In this episode of Wealth Mavericks, a listener named Luke brings a question that reflects what many physicians experience: he’s heard there’s real value in cash value life insurance, but he’s not sure how it fits into a bigger plan—or whether it even makes sense for him right now. The conversation that follows is less about hype and more about how this tool works, why it’s controversial, and how to think about it strategically based on where you are in your financial journey.
Why This Topic Feels So Polarizing
The team acknowledges upfront why cash value life insurance gets such strong reactions. On one side, you hear voices like Dave Ramsey and Suze Orman saying you should never touch it. On the other side, you’ll find agents and advisors who treat it like the answer for everyone.
But that kind of blanket advice misses something critical for physicians: your financial reality is not “general public.” Your income, tax exposure, and long-term wealth-building potential put you in a different category—one that often requires different tools, different strategies, and a more holistic plan.
That doesn’t mean cash value life insurance is always right. It means it should be evaluated like any other tool: based on purpose, fit, and execution.
The “Tools” Argument: One Size Never Fits All
One of the clearest explanations in the episode is the idea that no outcome can be built with just one tool. You wouldn’t build a home using only a hammer. In the same way, you can’t build wealth using only one financial product.
Insurance and financial planning offer different tools for different outcomes:
- Term life insurance
- Whole life insurance (a form of cash value life)
- Universal life insurance (also cash value, with variations like indexed or variable)
Each option works differently and is meant to be used differently. The real question is not “Is cash value life insurance good or bad?” The better question is: Is this the right tool for your specific goals and stage of life?
Is Cash Value Life Insurance an Asset?
A major point made in the discussion is that cash value life insurance can be an asset—depending on how it’s structured and used. Using a simple definition popularized by Robert Kiyosaki, an asset is something that grows in value and can support future income.
When viewed that way, cash value life insurance shares some similarities with real estate:
- A home has equity; a cash value policy has cash value
- You can borrow against home equity; you can borrow against policy value
- Both can be leveraged to create other opportunities
The difference is in how borrowing works. With real estate, borrowing equity usually means going through a bank, paying interest, and risking foreclosure if things go wrong. With cash value life insurance, the insurance company collateralizes the death benefit, which can create more flexibility in repayment and access—though it still comes with rules, costs, and risks if mismanaged.
The “Bank on Yourself” Concept—And Where People Get Misled
This episode also touches on a common marketing angle: using cash value life insurance as your own bank. The idea sounds appealing—borrow against your policy, pay yourself back, and keep your money “working.”
But the team emphasizes that the purpose matters. Using this tool to finance a rapidly depreciating asset like a car often makes little sense, even if you’re “paying yourself interest.” Where it becomes more strategic is when cash value life insurance is used to help create or acquire other assets—such as real estate or investments—where the borrowed capital can produce returns.
This is where many doctors get frustrated: they were sold the product, but not taught the strategy.
Why Banks Use This—and Why That Matters
One of the most compelling moments in the episode is the comparison to the banking system. Banks use cash value life insurance policies for executives and on balance sheets because of liquidity and how the asset is treated. A bank can’t just sit on cash—it needs capital to be productive.
The takeaway is not that doctors should copy banks blindly, but that the same financial rules are available to everyone. When used properly and compliantly, many of these tools exist in the same system banks operate within. The challenge is understanding the rules and building a plan that fits your goals.
When Cash Value Life Insurance Might Not Be the Right Move Yet
Luke’s question also brings up an important reality: timing matters.
For doctors early in their careers, cash value life insurance may not be the best first move. It tends to be more expensive than term insurance, and it generally requires stable surplus cash flow to fund consistently. For many physicians, the better strategy early on may be:
- Buy a strong term policy to do the “heavy lifting” of protection
- Build reserves and invest strategically elsewhere
- Increase financial margin so more advanced tools can be used later
The team also notes a second reason some doctors aren’t ready: spending habits. High income doesn’t automatically mean strong margins. If lifestyle expands to match income, there may not be enough surplus cash flow to fund wealth-building tools responsibly.
Freedom, as they put it, is found in the margins—financial margin, time margin, and health margin.
A Better Way to Think About It
This episode doesn’t claim cash value life insurance is magic. But it does explain why, in the right plan, it can feel that way—especially when doctors discover they can access money, deploy it into other assets, and still keep their policy appreciating under the right structure.
The true message is intentionality: the right tool, used the right way, at the right time, supported by the right team.
👉 Watch the full episode here: