What does the term "cash surrender value" refer to?

The term "cash surrender value" refers to the net amount the policyholder receives upon cancellation of a whole life or another type of permanent life insurance policy. This value is calculated based on the accumulated cash value of the policy, minus any outstanding loans and applicable surrender charges.

When a policyholder decides to "surrender" their policy, they are effectively choosing to give up the death benefit and receive the cash value that has built up while the policy was in force. This option provides the policyholder with liquidity and allows them to access funds that they may need for other purposes.

The concept of cash surrender value is integral to understanding how permanent life insurance works, especially the balance between the cash value and the death benefit, and how it transforms throughout the life of the policy.