What is the potential cash value someone may receive when surrendering their life insurance policy called?

The potential cash value that someone may receive when surrendering their life insurance policy is referred to as the salvage value. This term specifically pertains to the amount of money that the policyholder can obtain from the insurance company upon deciding to discontinue or surrender the policy before its maturity or the insured's death. In essence, the salvage value acts as a form of return on the investment made through the policy premiums.

It's important to recognize that this value is generated based on the savings component of the life insurance policy, particularly in permanent life insurance products. These policies often build cash value that policyholders can access. When surrendering the policy, this cash value represents a form of financial benefit to the policyholder.

The other terms are not applicable in this context. A premium refund typically refers to returning unearned premiums due to early termination of a policy, but it does not account for any accrued cash value. The term "cash benefit" is too vague and does not specifically indicate a cash value from surrendering a policy. Lastly, "market value" generally pertains to the value of an asset in the market and does not apply to life insurance policies, as they do not have a market value in the same sense as tradable assets do. Thus, salvage value accurately