cash surrender value


Also found in: Dictionary, Thesaurus, Legal, Acronyms, Wikipedia.

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 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.

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.

References in periodicals archive ?
Therefore, if cash surrender value equals ITR, and ITR equals FMV, then cash surrender value equals FMV.
Calculating the Taxable Gain on Surrender Net Cash Surrender Value $500,000 Outstanding Policy Loan +$3,500,000 Basis in the Contract -$2,000,000 Taxable Gain (Loss) $2,000,000
14 appears to be broader than the exemption provided for the cash surrender value of an insurance contract because it appears to protect both the party who originally procured the annuity contract and a successor beneficiary under the contract.
If the cash surrender value is higher than the cost basis, then that difference is treated as ordinary income and taxed at the policy owner's marginal tax rate.
Therefore, in this framework, the surrender decision can only be the consequence of a rational choice, taken after comparison, at any time, between the total value of the policy (including the option of surrendering it in the future) and the cash surrender value.
A never received any distributions under the contract and never borrowed against the contract's cash surrender value.
The cash surrender value method has a number of serious shortcomings when it comes to fairly accounting for the new breed of life-insurance products.
It is public policy that individuals must spend down the cash surrender value in those policies before qualifying for Medicaid.
In general, if interest rates are lower at the time of withdrawal than at the time the annuity contract was issued, the annuity's cash surrender value will be increased (thus, market value adjusted).
2009-13 presents the tax treatment of three common life insurance transactions: a taxpayer surrendering a whole-life insurance policy to the insurer for its cash surrender value, a taxpayer selling a whole-life insurance policy to an unrelated third party, and a taxpayer selling a term insurance policy to an unrelated third party who seeks to hold the policy for investment.
However, significant amounts of capital are being committed to the purchase of BOLI and the build-up of life insurance policy cash surrender value.
The value of the insurance policy, when purchased from a retirement plan, shall be the cash surrender value of the policy.