What is Cash Surrender Value?

Cash value is an insurance term that refers to the amount of surrender from a life insurance policy. In life insurance with a longer insurance period, due to the use of a premium payment system or a balanced pure premium system, a certain reserve of liability has been accumulated under the insurance policy. When the insured requests withdrawal, the insurer deducts a certain amount from the reserve The surrender fee, the balance is refunded to the insured or the policyholder as a surrender fee (also known as a "cancellation fee"). Life insurance policies that pay premiums can be submitted for withdrawal at any time and receive a surrender; Life insurance policies that pay insurance in installments can be submitted for withdrawal at any time after one or two years of payment. Such insurance policies The amount of surrender money that can be received at the time of surrender is the cash value of the insurance policy. An insurance policy with cash value is transferable after endorsement (sometimes subject to the agreement of the beneficiary according to the provisions of the contract). The transfer of the cash value of the insurance policy does not replace the insured. ^[1]

Cash value

In the long run

The reason why life insurance companies want to make deductions instead of withdrawing all

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The cash value of an insurance policy is also known as the "cancellation refund" or "surrender value", which refers to the amount that a life insurance company should pay back when the insured requests termination or surrender. That is: the cash value in the insurance contract = insurance premiums-operating expenses of the insurance company-commissions-insurance protection costs. China's current laws and judicial interpretations do not clearly stipulate whether the cash value of insurance policies can be used as enforceable property. In addition, there is little research on this in the theoretical circles. Therefore, opinions differ widely in practice and it is difficult to operate. The key to judging whether the cash value of an insurance policy can be classified as enforceable property depends on whether it has property attributes and whether its ownership is certain. I. Necessity of execution and reality of the cash value of insurance policies First, the cash value of insurance policies has property attributes. Article 68 of the Insurance Law states: "If the insured terminates the contract and has paid the insurance premium for more than two years, the insurer shall return the cash value of the insurance policy within 30 days from the date of receiving the notice of termination of the contract; If the insurance premium is two years, the insurer will return the insurance premium after deducting the handling fee in accordance with the contract. "The cash value of the insurance policy here means that the insurance policy will be equivalent only after the policyholder has paid the insurance premium for a certain period of time. Cash value. If the insurance premium has not been paid for more than a certain period of time, the insurance policy has no cash value; if the insurer does not want to continue to insure and asks to withdraw, the cash value of the insurance premium will not be lost as a result, and the insurer should refund Cash value. It can be seen that the cash value of the insurance policy has the property attribute and has the prerequisites of enforceability. Secondly, the attribution of the cash value of the insurance policy is deterministic and cannot be the insured or the beneficiary. The insured has the power to dispose of the property such as mortgage, transfer, etc. Therefore, the cash value of the insurance policy is generally recognized as a personal financial asset abroad. The policyholders registered in China's insurance contracts are real-name systems. Therefore, the owner of the cash value of the insurance policy is not only determined, but also has a clear identity. This provides operable favorable conditions for querying, sealing, and freezing the cash value of the insurance policy. Executability becomes reality. Because long-term life insurance has an investment function similar to savings, it is not risky, and it can also obtain economic security for life, death, and death. Therefore, it has gradually become a popular choice for people to invest. Failure to enforce the cash value of the insurance policy enjoyed by the executed party will not only damage the rights of the applicant, but also encourage the executed party to participate in the cash value of the insurance policy in order to circumvent the law and withdraw its investment savings and stock funds. Investment is not conducive to the development of markets such as savings and stocks.

"Cash Value" Provisions in the Insurance Law

The Insurance Law of the People's Republic of China

Article 32 If the age of the insured declared by the insured is untrue, and its true age does not meet the age limit agreed in the contract, the insurer may terminate the contract and return the cash value of the insurance policy in accordance with the contract. When the insurer exercises the right to terminate the contract, the provisions of Article 16 (3) and (6) of this Law shall apply.

If the age of the insured declared by the policyholder is not real, and the insurance premium paid by the policyholder is less than the insurance premium payable, the insurer has the right to correct and require the policyholder to pay the insurance premium, or pay the insurance premium in accordance with the actual insurance premium payment Pay in proportion to the premium payable.

If the age of the insured declared by the insurant is untrue, causing the insured to pay more insurance premiums than the insurance premiums payable, the insurer shall return the overcharged insurance premiums to the insured.

Article 37 If the validity of a contract is suspended in accordance with the provisions of Article 36 of this Law, the validity of the contract shall be restored after the insurer and the policyholder negotiate and reach an agreement. However, if the two parties fail to reach an agreement within two years from the date of termination of the contract, the insurer has the right to terminate the contract.

If the insurer terminates the contract in accordance with the preceding paragraph, it shall return the cash value of the insurance policy in accordance with the contract.

Article 43 If the insured intentionally causes death, disability or illness of the insured, the insurer shall not be liable for the payment of insurance benefits. If the applicant has paid insurance premiums for more than two years, the insurer shall return the cash value of the insurance policy to other rights holders in accordance with the contract.

If the beneficiary intentionally causes death, disability, or illness of the insured, or attempts to kill the insured intentionally, the beneficiary loses the right to benefit.

Article 44 For a contract on which the death of the insured is a condition for the payment of insurance benefits, if the insured commits suicide within two years from the date of the establishment of the contract or the restoration of the validity of the contract, the insurer shall not be liable for the payment of insurance benefits, but the Exceptions are those who are incapacitated when they commit suicide.

If the insurer does not bear the liability to pay insurance benefits in accordance with the preceding paragraph, it shall return the cash value of the insurance policy in accordance with the contract.

Article 45 If an insured person intentionally commits a crime or resists a criminal compulsory measure adopted in accordance with the law, resulting in his disability or death, the insurer shall not be liable for the payment of insurance benefits. If the policyholder has paid the insurance premium for more than two years, the insurer shall return the cash value of the insurance policy in accordance with the contract.

Article 47 If the policyholder terminates the contract, the insurer shall return the cash value of the insurance policy in accordance with the contract within 30 days of receiving the notice of termination of the contract .