Cash Surrender Value

  • The cash surrender value of a life insurance policy is the amount of money that a life insurance company will pay to the policy owner voluntary termination of the policy before its maturity or death of the insured.
    • To determine the cash surrender value, deduct any applicable surrender charges from the accumulation value (the savings component of universal Life, variable Life or whole life policies).
    • The surrender charges are higher in the early years of a policy, lowering on each policy anniversary (See below) until the cost is eliminated at some point, often in policy year 15 or 20.