Cash Surrender Value

Cash Value

The amount of cash that becomes available to an insured person upon the cancellation of his/her insurance policy. Most often, this applies to the savings portion of a canceled whole life policy. This value is considered an asset and can be borrowed against or used as collateral. It may also be called a cash surrender value or a surrender value.

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cash surrender value

The money paid by an insurance company to a policyholder who is canceling an annuity or cash-value life insurance policy. Cash value accumulates when premiums and interest on any previous cash value exceed the cost of insurance. Generally, the cash value a policyholder receives upon cancellation is not taxable unless it exceeds the sum of the premiums paid. Also called surrender value.

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Cash surrender value. The cash surrender value of a permanent life insurance policy is the amount you receive if you cancel or surrender your policy before you die.

It's a portion of the money that accumulates tax-deferred in your cash value account during the period you pay premiums on the policy, minus fees and expenses.

Generally the only portion of the cash surrender value that's subject to income tax is the amount that exceeds what you paid in premiums during the time the policy was in force, though you should check with your tax adviser.