Cash value

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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.

Cash value.

Cash value is the amount that an account is worth at any given time.

For example, the cash value of your 401(k) or IRA is what the account is worth at the end of a period, such as the end of a business day, or at the end of the plan year, often December 31.

The cash value of an insurance policy is the amount the insurer will pay you, based on your policy's cash reserve, if you cancel your policy. The cash value is the difference between the amount you paid in premiums and the actual cost of insurance plus other expenses.

References in periodicals archive ?
Either way, life insurance cash values can help meet these needs so your client doesn't have to tap into qualified plan resources or other assets.
Ed is an accountant who explains that the most important benefit in our tax code is the tax exclusion for life insurance cash values and death benefits if the policy is established correctly.
Taxing the internal buildup of life insurance cash values on an accrual basis
Annuity benefits would likely come from using accumulated life insurance cash values.
Traditionally, SERPs have been informally funded with cash, equities or life insurance cash values to ensure that the necessary cash flow is available at time of payout.
As a safe haven from future potential creditors--In many cases life insurance cash values are afforded significant protection under state law from the claims of creditors.
Dulisse says tax-free assets should be withdrawn first, such as Roth IRAs, life insurance cash values or annuities issued before 1982, where principal can be drawn first.
If properly structured, the The life insurance cash values arrangement will avoid the increase year by year and are expense and litigation which available for emergencies and may be involved if the Internal financial opportunities Revenue Service challenges the value of the business for estate tax purposes.
Life insurance cash values can be thought of as a separate asset class, with distinctive risk and return characteristics that might make it appropriate as a savings vehicle for retirement, education, or other goals.
Permanent life insurance cash values can have many business uses.
5) These settlement options are similar to those available with most life insurance cash values.

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