Cash Surrender Value
What Does Cash Surrender Value Mean?
Cash surrender value is the amount of money an insurance company pays to a life insurance or annuity policyholder if the policy is voluntarily terminated before it matures or the insured person passes away. This feature is typically available in most permanent life insurance policies that include a savings component.
It is also commonly referred to as surrender value.
Insuranceopedia Explains Cash Surrender Value
The cash surrender value is determined by the total premiums paid up to the termination date, minus any withdrawals, outstanding loans, and surrender charges. If the policyholder makes withdrawals or takes out a loan, these amounts reduce the policy’s surrender value. Surrender charges generally decrease over time and may no longer apply after a certain period, such as 15 years.
