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". This amount is net of any surrender charges and outstanding policy loans and interest thereon.

A life settlement

Life settlement

A life settlement is a financial transaction in which the owner of a life insurance policysells an unneeded policy to a third party for more than its cash value and less than its face value. Until recently, if a policyowner opted out of a policy by surrendering the policy or allowing it to lapse,...

can be a way in which a policyholder receives more cash for his policy.