Savings element

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Savings element

Used in the context of life insurance, the cash value built up in a policy, which equals the amount of premium paid minus the cost of protection. This excess is invested by the insurance company, and the returns are tax-deferred inside the policy.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Savings Element

The portion of a whole life insurance policy that is set aside and invested by the insurance company. Part of the policyholder's premium each month becomes part of the savings element, as do any gains from investment. The savings element becomes available to the policyholder upon the cancellation of the policy. Furthermore, the savings element is an asset belonging to the policyholder; it can be borrowed against or used as collateral. The amount of money in the savings element is called the cash-surrender value. Any investment gains in the savings element are tax-deferred until the policy is canceled.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
Naturally we continue to negotiate on other savings elements as well.aACA[yen]
These products featured very visible savings elements. But overly optimistic "illustrations" were made, way out into the future, ultimately giving the industry trouble after interest rates collapsed.
Daiichi Mutual had been cashing in on sales of policies with large savings elements.
If you think about ECR, category management is the selling element and the other three legs are savings elements."
Universal life insurance "unbundles" the protection and savings elements of traditional whole life insurance products.