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 ?
The current period reflects a $200,000 decline in COLI policy cash surrender values, while the prior period included $7.
All of those values are substantially greater than Henry's choice, the $700,000 cash surrender value.
The exemption protects the cash surrender value of a life insurance policy.
At the end of year two, he was going to distribute the life insurance policy out of his plan, pay income tax on the cash surrender value and file a gift tax return when he gifted the policy to an ILIT, which he was about to create.
The cash surrender value of an endowment life insurance policy is almost never given by the full policy reserve.
Three firms reported increases in the cash surrender value of life insurance.
Cash value corridor: A contract falls within the cash value corridor if the death benefit under the contract at any time is not less than the applicable percentage of the cash surrender value.
Under the cash surrender value method, when a policy is purchased by a third party, the difference between the acquisition cost and cash surrender value is recognized as a loss.
The first tier is the difference between the cost basis and cash surrender value, taxed as ordinary income.
In particular, the illustrations were alleged to create the impression a policyholder could make one $8,000 premium payment on a $1 million face value policy, cease making premium payments, but continue to enjoy $50,000 of life insurance coverage and a $14,000 cash surrender value after fourteen years.