The Definition of Accumulation for Insurance

Accumulation for insurance typically refers to accumulation in life insurance policies. Premiums are paid into a policy and charges and costs are deducted. This is also referred to as account value.


Universal life insurance is a secure option for permanent life insurance where accumulation is a factor. It combines factors from term-life insurance policies with whole-life insurance policies. Universal life insurance pays policy holders interest on their accumulated account balance.


Accumulated value is used to find out a policy holder’s policy amount. Each month, charges are posted to a policy holder’s account for the cost of the policy and any other fees associated with the account and interest is added to the balance. The result of this is the account balance or the accumulated balance in the insurance account.



After paying into a policy for many years, the accumulated amount is typically enough to cover the cost and fees of the policy. The accumulated balance in the account then pays the costs and the policy holder never has to invest any more money into the policy.