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.