What does the cash value of insurance mean, and what does the “cash value” of insurance mean?

Cash value refers to the part of the amount returned by the insurance company to the policyholder when the policyholder surrenders the policy or the insurance company terminates the insurance contract. Under normal circumstances, insurance companies determine the insurance rate according to the probability of occurrence of an insured accident. The higher the accident probability, the higher the insurance rate, and vice versa. One type of life insurance is called cash value life insurance which helps to understand cash value. Cash value is first and foremost a type of life insurance that pays for the death of the policyholder and accumulates value during the life of the policyholder, that is, appreciation. Holders can use the cash value as a tax-sheltered investment (interest and earnings are tax-free) and can pass it on to their heirs. It is therefore considered permanent life insurance. The opposite is term life insurance: it protects for a specified period, also known as temporary insurance. Policy benefits are only payable upon the death of the insured within the specified period and the policy must be in force at the time of death. Extended information: Conditions for refunding the cash value of insurance: According to the Insurance Law, an insurance company shall refund the cash value of the policy to the policyholder by the contract when the following circumstances occur: 1. Insurance premiums for more than two years; 2. In a contract with death as the condition for payment of insurance benefits, the insured commits suicide within two years from the date of establishment of the contract; The insurance premium has been paid for more than two years; 4. The insured cancels the contract and has paid the insurance premium for more than two years. In addition, the “Insurance Law” also stipulates that if the insured or the beneficiary intentionally causes the death, disability, or disease of the insured, the insurance company shall not be responsible for paying the insurance money. If the insured has paid the insurance premiums for more than two years, the insurance company shall refund the cash value of the insurance policy to other beneficiaries with rights as agreed in the contract. Reference source: Baidu Encyclopedia – Insurance Cash Value

Cash value, an insurance term, refers to the value of a life insurance policy with a saving nature. The insurer usually saves a liability reserve for the performance of contractual obligations. If you surrender the policy in the middle, the liability reserve of the policy will be used as the refund for the termination of the contract. The amount that the life insurance company should refund when the insured requests termination or surrender of the policy.

There are three concepts in insurance: cash value, insurance amount, insurance cost, insurance cost, which is the cost you paid, and the cash value is the balance after deducting some necessary expenses from the insurance cost you paid. If you are 35 years old, then when the insurance company finds out about this, it will terminate the insurance contract with you and deduct some expenses. For example, if you pay 1500 and you deduct 1000, then your cash value is only 500, which is why the cash value will be less. Of course, this is just, For example, this is just one of the best-understood types of insurance. This is the money you will receive in the end. It is agreed in your insurance contract. For example, if you buy life insurance, you usually have an accidental death benefit. If you pay 1,200 per year. When you are 60 years old, you will start to receive pensions. Your contract has long agreed that it may be 500 yuan per month, etc. If you have not reached the age to explain, then he also has an accidental death. The maximum compensation may be 100,200,000. Wait, that’s called the insurance amount, and that’s the money you end up getting.

1. What exactly is the cash value? 

If it is extremely simple to understand, you can think that “cash value” = “money you can get back when you surrender”, because, for most people, this is the biggest role of cash value. In addition to the cash value, there are many professional terms in the policy, such as waiting period, hesitation period, termination period, suspension period, etc. Only by mastering these concepts can we help us understand the insurance contract. The professional terms mentioned in the article are sorted out: super complete! Everything you want to know about insurance is here 

2. Does every insurance have cash value?

 Normally, only long-term insurance has a cash value. For example, the insurance period of several decades of critical illness insurance, life insurance, long-term accident insurance, long-term medical insurance, annuity insurance, etc., all have cash value. The premiums for 1-year insurance are calculated costs based on the risk probability of the current year, and there will be no excess retention to “balance” premiums. Therefore, 1-year insurance has no cash value.

3. What can cash value be used for? 

Policy loan: If there is a problem with your capital turnover, or if you want to earn the interest difference of the large annuity policy that you pay as a single payment, you can apply to the insurance company for a “policy loan”. And how much you can borrow depends entirely on the “cash value” of your current policy. General insurance companies will allow 80-90% of the cash value of the policy to be loaned. The loan period is 6 months, and the interest rate insurance company will set it, which is generally the same as the bank loan interest rate in the same period. Whether there is a “policy loan” function depends on the terms and conditions, and general annuity insurance has it. 

Reduced payment: When you do not want to continue to pay premiums, but do not want to lose the protection of the policy, you can offset the cash value of the current policy to pay the premiums at one time, and the insured amount should be reduced according to the current price. Using this function, is often used when you have been paying for many years and suddenly feel that the insurance is not suitable, but you have lost a lot of money and lost the guarantee after returning it. Whether or not this function is available also depends on the terms and conditions.

Ping said the danger is known, let you know more about things you don’t know.

Cash value is also known as “refund for termination of contract” or “surrender value”. The premium is the money that the insured handed over to the insurance company, and the contract will continue to be valid only if the premium is paid normally. Many people think that surrendering the policy will refund the premiums paid. If the policy surrenders after the hesitation period, it will be refunded according to the cash value, and the premiums paid will not be refunded. Surrendering the policy during the hesitation period is also called withdrawing the order, and the premium paid will be refunded, and some insurance companies will deduct no more than 10 yuan in cost. These products have cash value. Only life insurance of savings nature has cash value, such as endowment insurance, whole life insurance, term life insurance with a term of more than one year, endowment insurance, universal insurance, participating insurance, etc. The cash value is also related to the payment time. The longer the payment time is, the higher the accumulated cash value will be. Even if it is the same insurance product, the cash value of the insurance may be different due to the different premiums paid and the age of the insured. will be different. Therefore, when purchasing these products, policyholders need to know the cash value of these products.

Cash value is the surrender amount of a life insurance policy. In life insurance with a long insurance period, due to the single premium or balanced pure premium system, a certain liability reserve is accumulated under the policy. When the insured requests surrender, the insurer deducts a certain amount from the liability reserve. Surrender fee, the balance is refunded to the insured or policyholder as surrender payment (also known as “termination payment”). A life insurance policy with single premiums can be surrendered at any time to receive the surrender money; for a life insurance policy that pays insurance premiums in installments, one or two years after the premium is paid, the surrender can be submitted at any time to receive the insurance money. This type of insurance policy The amount of surrender money that can be received at the time of surrender is the cash value of the policy. A policy with cash value is transferable upon endorsement (and sometimes with the consent of the beneficiary, as stipulated in the contract), and the transfer of the cash value of the policy is not a replacement of the insured. When the insured is young, the probability of death is low, and the insured pays more premiums than they need, and the excess premiums will be accumulated by the insurance company year by year. When the insured is old, the probability of death is high, and the premiums paid by the insured in the current period are not enough to pay the current indemnity. This part of the overpaid premiums and the interest they generate are accumulated every year, which is the cash value of the policy, which is equivalent to a kind of savings of the policyholder in the insurance company. Extended information: Value:

 1. To cancel the insurance contract, whether we take the initiative to go to the insurance company to surrender the insurance contract after the hesitation period, or the insurance company finds that we have not informed the truth, or because of liability exemption matters, the insurance contract is canceled. At this time, All we can get is the cash value of the insurance contract at the time, which is the part of the money that originally belonged to us. 

2. Policy loan According to the regulations of the regulatory agency, if an insurance company provides policy loan services, the policy loan ratio shall not be higher than 80% of the current cash value or account value of the policy. At present, most life insurance policies that can provide the function of “policy loan” can provide a loan amount of 80% of the current price. Of course, since it is a loan, it must be repaid, and the validity period of each loan shall not exceed six months. Reference source: Baidu Encyclopedia – cash value

Cash Value: The value of a life insurance policy with savings properties. The insurer usually saves a liability reserve for the performance of contractual obligations. If you surrender the policy in the middle, the liability reserve of the policy will be used as the refund for the termination of the contract. The amount that the life insurance company should refund when the insured requests termination or surrender of the policy.

Cash value refers to the cash that you can withdraw from your current policy. If you plan to surrender the policy, the cash value has practical significance. However, generally, people do not buy insurance for this cash value, so you don’t have to worry about it. Just care about your insurance liability.

The so-called cash value of the policy is also known as “termination refund” or “surrender value”. For the policyholder and the insured, the cash value has the following three functions: 1. The policyholder surrenders the policy. Surrender is paid at the cash value. If there is a policy loan, automatic advance payment, etc., the insurance company will first deduct the arrears and interest from the cash value when the policy is surrendered. 

Policy loan. In general insurance policies with policy loan function, the maximum loan amount allowed by the policyholder is based on the cash value as the denominator. Most insurance policies stipulate that the maximum loan amount of the policyholder shall not exceed the cash value at the time of the contract after deducting outstanding insurance premiums, borrowings, and 80% of the balance after interest, and the term of each loan shall not exceed 6 months. Policy cash price 3. Dividends. In a participating insurance contract, the annual dividend enjoyed by the policyholder is based on the cash value as the denominator. The dividends paid by insurance companies are not based on the proportion of the insurance premiums paid by all policyholders, but the cash value. If the business person did not explain clearly to the policyholders, disputes would often arise when dividends were distributed the following year. good luck!

Cash value is an insurance term that refers to the surrender amount of a life insurance policy. In life insurance with a long insurance period, due to the single premium or balanced pure premium system, a certain liability reserve is accumulated under the policy. When the insured requests surrender, the insurer deducts a certain amount from the liability reserve. Surrender fee, the balance is refunded to the insured or policyholder as surrender payment (also known as “termination payment”). A life insurance policy with single premiums can be surrendered at any time to receive the surrender money; for a life insurance policy that pays insurance premiums in installments, one or two years after the premium is paid, the surrender can be submitted at any time to receive the insurance money. This type of insurance policy The amount of surrender money that can be received at the time of surrender is the cash value of the policy. A policy with cash value is transferable upon endorsement (and sometimes with the consent of the beneficiary, as stipulated in the contract), and the transfer of the cash value of the policy is not a replacement of the insured.

Cash value is an insurance term that generally refers to the cash value of a policy and refers to the surrender amount of a life insurance policy. In life insurance with a long insurance period, due to the single premium or balanced pure premium system, a certain liability reserve is accumulated under the policy. When the insured requests surrender, the insurer deducts a certain amount from the liability reserve. The surrender fee and the balance will be refunded to the insured or policyholder as surrender payment (also known as “termination payment”). The cash value of traditional life insurance is calculated as follows: the cash value of the policy = the premiums paid by the policyholder – the amount of the insurance company’s management expenses shared on the policy – the commission paid by the insurance company to the salesperson for the policy – the insurance company has Interest accrued on the remaining premiums of the pure premiums required to assume the coverage of the policy. This answer is provided by Youqianhua. Youqianhua is a credit service brand under Duxiaoman Finance (formerly Baidu Finance). It has a low-interest rate. Click the bottom of the mobile phone to measure the amount immediately. The maximum loan amount is 200,000.

Cash value is simply the money you get back when you surrender your policy. When many people surrender their insurance, they find that they have paid for several years, but only a little is returned. That’s because what we get when we surrender is not the premium, but the cash value. We usually pay insurance premiums, usually with a payment period of 20-30 years, and the annual premiums are the same. The insurance company deducts the insurance protection costs and company operating costs from the premiums we paid in the early stage, and the remaining part of the money is rolled over at a certain interest rate, forming a cash value. Typically, insurers drive down the cash value of previous years to less than the total premiums paid to control surrender rates. As the premium years increase, the gap between them narrows and the cash value even exceeds the premiums paid. But after a high point, the cash value will slowly decrease. When the insurance contract expires, the cash value of the policy can even drop to zero. Therefore, as long as the hesitation period has passed, the surrender will only return the cash value. Because whether or not there is an accident, the premiums are spent as protection costs and operating costs. Even if you don’t take the risk, you have to pay the cost of protection for the person who takes the risk. This is called risk sharing. The above is only the basic knowledge of cash value, but there are many terms in the insurance contract. If you are buying insurance for the first time, then the following insurance knowledge is recommended to read first, which can help you understand the insurance contract: super complete! Everything you want to know about insurance is here

The insured cash value is the cash that the policyholder can get back when the policy is surrendered. Since long-term life insurance usually adopts balanced premiums, after the policyholder pays the premiums for several periods, a certain liability reserve will be formed, and the liability reserve is a liability to the insured. Therefore, when the contract is terminated and surrendered, the surrenderer needs to return this part of the liability to the policyholder. The cash value of the policy is exactly the insurance cash value: calculated based on the liability reserve. The initial cash value is very low because the policyholder pays less and the amortization of the policy cost is large at the initial stage of insurance. Conditions for refunding the cash value of the policy According to the Insurance Law, the insurance company shall refund the cash value of the policy to the policyholder by the contract in the following circumstances: 1. The insurance company terminates the insurance contract according to the regulations, and the policyholder has paid the full two Insurance premiums for more than one year: 2. In a contract that takes death as the condition for payment of insurance benefits, the insured commits suicide within two years from the date of establishment of the contract; Insurance premiums for more than two years: 4. The insured cancels the contract and has paid the insurance premiums for more than two years. In addition, the “Insurance Law” also stipulates that if the insured or the beneficiary intentionally causes the death, disability, or disease of the insured, the insurance company shall not be responsible for paying the insurance money. If the insured has paid the insurance premiums for more than two years, the insurance company shall refund the cash value of the insurance policy to other beneficiaries with rights as agreed in the contract.

The insurance premiums we pay every year are divided into three parts by insurance companies, one part is used as a liability reserve, the other part is used to pay for the company’s operation and management fees or commissions, etc., and the last part is savings for investment, usually, this part is what we take Cash value in hand. To put it bluntly, the cash value ≠ the premium paid. When we surrender the policy, it is not the premium paid but the cash value relative to the refund. Generally, only long-term insurance will have cash value, such as 30-year or lifetime critical illness insurance, life insurance, long-term accident insurance, long-term medical insurance… One-year consumer insurance has no cash value.