What is Cash Surrender Value (CSV)?

Definition: Cash surrender value is the amount of money a policyholder will receive from his insurer if the policy is canceled before maturity. It refers to the cash payment issued by the insurer to the holder under the circumstance of a cancellation.

What Does Cash Surrender Value Mean?

What is the definition of cash surrender value? CSV is a term most commonly employed in the insurance industry; it is mostly used when it comes to whole life insurance policies or annuities. In the case of a whole life insurance policy, the insurer agrees with the holder to make a payment or a series of payments to a given beneficiary in the event of the holder’s death.

In this case, the CSV of the policy will be the amount of money paid to the holder if he decides to cancel the policy before his death. Since this kind of insurance policy has a savings component, the CSV must be calculated to establish how much the holder has saved by the time the policy is canceled. The CSV increases over the years of the policy because of the payments made by the holder.

Let’s illustrate this with an example.


Mrs. Norton holds a whole life insurance policy issued by Great Life Insurance INC. Given that she has another life insurance policy with a different company she decides to cancel the one she holds from Great Life. The purpose of this cancellation is to take the money saved through the policy to set up a trust fund for her sons. Mrs. Norton will meet with her insurance agent to ask him how much she will receive by canceling the policy before its maturity. What should the agent do?

In this case, Mrs. Norton is asking for the CSV of her policy, given that the policy is being canceled before its maturity.

The agent should review the terms and conditions of the policy to determine how the CSV should be calculated and after doing the math, he should inform Mrs. Norton how much she will receive from the policy after the cancellation.

Summary Definition

Define Cash Surrender Value: CSV means the amount of cash a policy will pay out if it is canceled before the maturity date.