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 ?
Likewise, the Tax Court has held that the cash surrender values of paid-up additions are not constructively received by the policyholder.
7m expense associated with decreases in cash surrender values of company-owned life insurance policies.
08 per share) decrease in the cash surrender values of company-owned life insurance (COLI) policies, while the corresponding prior-year quarter included a USD3.
A section 1035 exchange may provide a higher death benefit and cash surrender values than the original policy, but even if it does improve upon the old policy, it may not be the optimal solution.
Holders of life insurance policies with cash surrender values would be notified of that amount on an annual basis according to legislation introduced by Assemblyman Arthur J.
the premiums paid less dividends declared, if any) over the increase in cash surrender values is considered an insurance expense.
These arrangements provide limited protection of policy cash surrender values from declines in the values of the policies' underlying investments.
14 provides: "The cash surrender values of life insurance policies issued upon the lives of citizens or residents of the state and the proceeds of annuity contracts issued to citizens or residents of the state, upon whatever form, shall not in any case be liable to attachment, garnishment or legal process in favor of any creditor of the person whose life is so insured or of any creditor of the person who is the beneficiary of such annuity contract, unless the insurance policy or annuity contract was effected for the benefit of such creditor.
First, when compared to CAUL, SGULs may generate only modest cash surrender values that may vanish by age 85 to 95.
Cash surrender values will generally be assets of the company if the company owns the policy and is the beneficiary.
Considering that cash surrender values average just 4% of policy face amounts, the decision to recommend a life settlement is an easy one for CPAs advising employers or clients unaware of the potential economic gain from these hidden assets.
Fair valuation of such an option, as well as an accurate assessment of the cash surrender values, are clearly crucial topics in the management of a life insurance company, both on the solvency and on the competitiveness sides.