Useful Terms and Definitions

Cash Surrender Value - CSV

• If policyowner terminates policy, a portion of the reserve is returned to the owner as Cash Surrender Value.
• CSV is guaranteed in traditional permanent policies and stated in the contract
• Usually no CSV in the first two years because of issue costs, compensation to agent and lack of time to earn interest on premiums
• CSV may be less than policy reserve because:
  • government may have set a higher reserve level than can be accumulated from premium charged
  • issue costs may not have been recovered yet