Equity

What Does Equity Mean?

Equity refers to ownership of a particular asset. It commonly takes the form of securities that are traded on stock exchanges. Stocks are a type of security that represents a share of ownership in a company. In the context of insurance, many life insurance policies include an equity component. This means that policyholders can choose to allocate a portion of their premiums toward investing in equities.

Insuranceopedia Explains Equity

Many permanent life insurance policies provide an equity option. However, term life insurance policies typically do not include an equity component. Many policyholders of whole life or permanent life insurance choose to invest in equities to grow the cash value of their policies. If these investments are successful, they can generate substantial returns. Some individuals opt to use this money to cover future premiums, while others may utilize it in various ways.