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 ?
Trustmark's new flagship Universal Life plan provides greater Living Benefits for Long Term Care, guaranteed issue coverage, improved mortality based on longer life spans, and superior cash values across a wider range of interest rate environments.
After the first few years, the life insurance policy is preferred because the higher investment in the life insurance results in lower taxes, in spite of the fact that the before-tax cash values are relatively equal.
statutory reserves and cash values for traditional life-insurance products will be decreased an average of 20%;
In today's interest and market environment, Pacific Indexed Accumulator-NY appeals to clients who want the potential of earning higher interest in their policy cash values but want to limit the impact of negative returns to 0%," commented Alyce Peterson, a Pacific Life & Annuity officer.
Most are privately owned to help accumulate cash values.
It can provide guaranteed lifetime income that cannot be outlived by using the accumulated cash values.
Planners can now combine a new Flexible Paid Up Additions Rider (PUAR) with a new Level Term Rider to create higher early cash values, which in turn can be accessed through favorable policy loan provisions.
So, the next step in our analysis is to determine the cash value for each branch of our tree diagram, since the final cash values will represent the payoffs for these branches.
To identify plan abuses, the IRS is looking at the use of "springing cash values," which occurs when a plan makes large initial payments on its insurance contracts, then the plan is terminated and the contracts transferred to plan participants.
Based on this narrow view it's no wonder so many CPAs fall into the trap of agreeing to allow unneeded policies to lapse or be surrendered for just their cash values.
Major capital improvement projects such as Central Park and road and bridge construction have prevented the city from making more investments, city officials said, noting that cash values of all investment funds peaked in July of 1999 with $60 million.
If you must buy a cash-value policy, universal life is cheaper than whole life and builds cash values sooner.