Cash Surrender Value


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Cash Surrender Value

The amount of money that an insurance company pays the insured upon cancellation of a life insurance policy before death and which is a specific figure assigned to the policy at that particular time, reduced by a charge for administrative expenses.

The cash surrender value of an insurance policy is not based upon its actual value, but upon its reserve value—the face amount of the contract discounted at a specific rate of interest according to the insured's life expectancy. Not all life insurance policies have cash surrender values; the terms of the policy must so provide.

References in periodicals archive ?
Evaluate any offers clients receive to sell their policy, versus the cash surrender value of the policy.
Any distribution that reduces the cash surrender value of a contract and that is made within two years before a reduction in benefits under such contract will be treated as made in anticipation of a reduction.
One could argue that the $11,782,833 cash surrender value was a "dead" asset, because the cash surrender value adjusts (reduces, in this case) the net at risk for the issuing life insurance carrier.
Holders of life insurance policies with cash surrender values would be notified of that amount on an annual basis according to legislation introduced by Assemblyman Arthur J.
the premiums paid less dividends declared, if any) over the increase in cash surrender values is considered an insurance expense.
Exemption for Cash Surrender Value of an Insurance Policy Only Applies to an Insured's Creditors: Section 222.
In this case, the cash surrender value may not be an asset of the corporation.
Let's look at a scenario involving a 77-year-old female who owns an insurance policy with a $900,000 face amount and a current cash surrender value of $68,296.
If distributed, the policy's value for income and gift tax purposes also would be its cash surrender value.
A surrender option is an American-style put option that entitles its owner (the policyholder) to sell back the contract to the issuer (the insurer) at the cash surrender value.
Not provide for a cash surrender value or other money that can be paid, assigned, pledged or borrowed.