surrender 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.

surrender value

References in periodicals archive ?
Tax on the "inside buildup" of cash surrender values generally is not deferred in the case of contracts issued after December 31, 1984, that do not meet the statutory definition of a "life insurance contract.
The second option, assuming the client gets approved for new coverage, would be to transfer the cash surrender values into a new policy using section 1035, with a death benefit of equal value (or $60 million).
He further stipulates in the legislation that every company issuing life insurance policies for delivery in New York state which contain cash surrender value and which provide to the policy owner a notification of premium due shall set forth in such notification that the policy contains a cash surrender value and that further information, including the amount of such cash surrender value, shall be available from the insurer upon written request from the policyowner.
When it is intended to surrender a universal life policy value during the normal operating cycle, the surrender values might be carried on the balance sheet as a "Current Asset," as opposed to a "Noncurrent Asset.
Most CAUL products have no secondary guarantee premiums and will only stay in force as long as cash surrender values are sufficient to cover the monthly charges and costs of insurance.
Unearned premiums (prepaid insurance) are classified as part of "working capital,"3 but cash surrender values are not.
The market is so buoyant almost any policy with a surrender value above pounds 2,500 finds a buyer.
The practice has become widespread: the Life Settlement Institute reported last April that to date, life settlements have paid life insurance policy owners an aggregate of more than $1 billion over surrender value for their policies.
A life settlement turns insurance assets into cash, giving the original policyholder an amount greater than the cash surrender value in exchange for ownership of the policy.
In a survey of 100 funds the company found that in 71 cases surrender values after deducting penalties were worth at least ten per cent more than the underlying fund value.
Many policies could be sold for a higher figure - on average 15 per cent more - than their surrender value.
Despite the market significance of universal life, almost no information exists about the actual determinants of universal life surrender values.