Definition of "Cash Surrender Value"

This is the amount available to the owner of a life insurance policy upon voluntary termination of the policy before it becomes payable by the death of the life insured. This does not apply to term insurance but only to those policies which have reduced paid up values and cash surrender values. A cash surrender in lieu of death benefit usually has tax implications.

The amount that the policyowner is entitled to upon surrendering a cash value life insurance policy. The amount is determined by taking the account value of the policy and deducting any surrender charge or any outstanding policy loan and interest thereon. Also see nonforfeiture provision and Life Product Comparison.