Cash value


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Related to Cash value: cash surrender value, Cash Value Added

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 ?
However, if the RCV settlement is $20,000 and the actual cash value is $15,000 and the insured spends $20,000 to restore the property to its preloss condition, then the insured receives $5,000 for the depreciation.
Term insurance may be convertible to "permanent" cash value insurance without additional evidence of insurability.
However, after explaining the tax deferral of the cash inside build-up and the opportunity to take tax-free withdrawals and loans to supplement retirement income, many clients will appreciate the potential value of permanent cash value life insurance in their overall planning process.
Both products require time for the cash value to build up to a meaningful amount, so the client should be willing to wait for distributions--generally at least 10 years.
Dividends and access to cash values can be extremely useful to policyholders throughout life and especially before and during retirement.
UNIVERSAL LIFE INSURANCE offers flexible premium payments, an adjustable death benefit, and cash values that are sensitive to current interest rates.
This is the oldest kind of cash value life insurance, meaning it combines a death benefit with a savings component.
Here, the issue was whether the insurer could automatically deduct 20 percent of a contractor's overhead and profit in addition to depreciation in order to reach actual cash value.
The FTB announced tax benefits for businesses and employees who contribute the cash value of their vacation, sick leave or personal leave time to Hurricane Katrina relief before Jan.
When purchasing homeowners insurance, it's important to distinguish between a cash value policy and a replacement cost policy.
This article explains how CPAs can use a third option--a life settlement--to help eligible clients and employers dispose of unneeded life insurance policies now for more than the cash value rather than wait for the policy to pay off at the insured's death.