Cash Surrender Value

AAA

DEFINITION of 'Cash Surrender Value'

The sum of money an insurance company will pay to the policyholder or annuity holder in the event his or her policy is voluntarily terminated before its maturity or the insured event occurs. This cash value is the savings component of most permanent life insurance policies, particularly whole life insurance policies. Also known as "cash value", "surrender value" and "policyholder's equity".

INVESTOPEDIA EXPLAINS 'Cash Surrender Value'

Cash surrender value applies to the savings element of whole life insurance policies that are payable before death. However, during the early years of a whole life insurance policy, the savings portion brings very little return compared to the premiums paid.

RELATED TERMS
  1. Group Carve-Out Plan

    A type of group term life insurance designed to appeal to well-paid ...
  2. Surrender Rights

    A right to cancel an annuity or life insurance contract in exchange ...
  3. Permanent Life Insurance

    An umbrella term for life insurance plans that do not expire ...
  4. Universal Life Insurance

    A type of flexible permanent life insurance offering the low-cost ...
  5. Nonforfeiture Clause

    A clause in an insurance policy that allows for the insured to ...
  6. Annuity

    A financial product sold by financial institutions that is designed ...
Related Articles
  1. Cashing In Your Life Insurance Policy
    Options & Futures

    Cashing In Your Life Insurance Policy

  2. Getting the Whole Story on Variable ...
    Options & Futures

    Getting the Whole Story on Variable ...

  3. Life Insurance: How To Get the Most ...
    Retirement

    Life Insurance: How To Get the Most ...

  4. Converting An IRA Annuity To A Roth: ...
    Taxes

    Converting An IRA Annuity To A Roth: ...

comments powered by Disqus
Hot Definitions
  1. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  2. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  3. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  4. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  5. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  6. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
Trading Center