YOU ASK:
What is the definition of Cash Value?
WE ANSWER:
The Cash Value (which is also known as the Cash Surrender Value) is the amount that the policy owner gets to receive when he cancels his life insurance policy. The Cash Value also refers to the amount the insurer has to return to the annuity owner when he surrenders the annuity before the payments become due.
Deductions such as policy loans and surrender penalties or charges are also computed to get the cash value.
For life insurance policies, the cost of surrendering the policy also includes the fact that premiums will be higher if the policy owner wants to buy a new policy for himself. A new contestability period will also apply to the new policy.
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