Cash Surrender Value

The sum of money an insurance company will pay to the policyholder or annuity holder in the event his or her policy is voluntarily terminated before its maturity or the insured event occurs. This cash value is the savings component of most permanent life insurance policies, particularly whole life insurance policies. Also known as "cash value", "surrender value" and "policyholder's equity".

Investopedia Says:
Cash surrender value applies to the savings element of whole life insurance policies that are payable before death. However, during the early years of a whole life insurance policy, the savings portion brings very little return compared to the premiums paid.

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Accumulated paid-in value of a life insurance policy that qualifies as collateral on a bank loan. Banks usually will advance amounts up to the cash surrender value of a life insurance policy, less the interest charged on the loan. Besides taking an Assignment of the insurance policy, which transfers title to the policy to the lender, the lender usually will ask the borrower to sign a separate contract stating the lender's rights. Loans secured by life insurance are a commonly used way to obtain bank credit. The lender usually advances up to 90% of paid-up cash value, as of the most recent payment date. Cash value is determined from a schedule, which may be in the policy itself or from the insurance company issuing the policy. The paid-up value may be used as collateral for a bank loan, although bank rates are often higher than rates insurance companies charge for policy loans. See also Key Man Insurance.

The amount of money that an insurance company pays an insured upon cancellation of a life insurance policy before death and which is a specific figure assigned to the policy at that particular time, reduced by a charge for administrative expenses.

The cash surrender value of an insurance policy is not based upon its actual value, but upon its reserve value — the face amount of the contract discounted at a specific rate of interest according to the insured's life expectancy. Not all life insurance policies have cash surrender values; the terms of the policy must so provide.