Cash Surrender Value

The Cash Surrender Value-also known as the life insurance cash value-is the amount of cash in the life insurance policy that the company has agreed to pay the policy or annuity holder when he or she terminates the policy before it matures or before the applicable death occurs.

The cash in the life insurance policy is derived from the savings portion of whole life policies. The life insurance cash value is always net of any surrender charger or outstanding policy loans.

During the initial few years of the whole life insurance policy's existence, the life insurance cash settlement is often too low for termination to be beneficial. In fact, the life insurance cash settlement is usually less than the premiums paid during the first few years.

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