What is cash surrender value of life insurance classified as

Cash surrender value refers to the actual amount of money you receive when you cancel—or surrender—your life insurance policy or annuity, minus surrender fees or any funds needed to pay off loans or unpaid premiums. In the case of annuities, it may be called the annuity surrender value.

What type of account is cash surrender value of life insurance?

Cash surrender value of life insurance\n\n Cash value is a component of a whole life policy and other types of permanent life insurance. With these types of life insurance policies, your insurance provider takes a portion of your premiums and puts it into a cash value account, where the money can grow.

Is cash surrender value of life insurance a liability?

If there is a loan on a life-insurance policy, we consider it permissible either to show the cash surrender value as a current asset and any loan against it as a current liability or to show the cash surrender value below the current asset sec tion with the loan as a deduction.

What type of asset is cash surrender value?

Cash surrender value is money an insurance company pays to a policyholder or an annuity contract owner if their policy is voluntarily terminated before maturity or an insured event occurs. This cash value is the savings component of most permanent life insurance policies, particularly whole life insurance policies.

Is cash surrender value a current asset?

Examples of other current assets are the cash surrender value of life insurance policies, advances paid to suppliers, and advances paid to employees. Since these residual accounts are current assets, their contents must be convertible into cash within one year or one business cycle.