Cash Surrender Value Definition

An item’s cash surrender value is the amount of money it is worth if it is voluntarily surrendered; the term nearly always refers to a life insurance policy that has a pre-death term allowing the policy-holder an early exit from the contract. For example, an aging individual might have a life insurance policy but need cash to pay for medical treatment; they might be able to surrender and cancel the life insurance policy for cash out value which could then be used to pay for medical treatment. A policy’s cash out value is never fully equivalent to its full-term value.