What is a source of supplemental income for a life insurance policy owner?

The cash value of a life insurance policy serves as a source of supplemental income for the policy owner. As whole life insurance policies accumulate cash value over time, policyholders can access this value through withdrawals or loans. The cash value growth is typically tax-deferred, and the policyholder can use it for various purposes, such as funding education, supplementing retirement income, or covering emergencies. This feature makes cash value a valuable asset beyond the death benefit that the policy provides.

Other options, while related to the life insurance context, do not provide a straightforward source of supplemental income. Annual premiums are payments made to maintain the policy and do not represent an income source. Loan interest refers to the charges incurred when borrowing against the cash value, which can reduce the cash value available and does not provide income. Insurance dividends, while they can provide financial benefits, are typically a return of excess premiums and do not equate to ongoing income in the same direct manner as accessing the cash value.