The cash surrender value refers to the amount that the insurance company will refund to the policyholder according to the contract when the policyholder applies for surrender. The calculation method of cash value is usually based on the agreement of the insurance contract and relevant regulations, and different insurance contracts have different calculation methods.
Generally speaking, the cash value is calculated as follows: cash value = premiums paid by the policyholder - administrative expenses of the insurance company - commission of the salesperson - net premiums incurred + interest accrued on the remaining premiums.
The premiums paid, management fees, salespeople's commissions and net premiums incurred are fixed, while the interest accrued on the remaining premiums varies depending on the time and interest rate.
When calculating the cash value, there are a few things to keep in mind:
1.Different insurance products have different formulas for calculating cash value, so they need to be calculated according to the specific insurance contract.
2.If the policy is surrendered within the cooling-off period, the insurance company will refund the premium paid in full without any handling fee.
3.If the policyholder applies for surrender within a certain period of time after the effective date of the insurance contract, the insurance company will calculate the cash value based on the remaining coverage period and interest rate.
4.If the policyholder has already received the insurance benefit or has already received a claim, the cash value at the time of surrender needs to be calculated according to the actual situation.
In short, the calculation method of surrender cash value is calculated according to the agreement of the insurance contract and relevant regulations, and different insurance contracts have different calculation methods. If you need to know the specific calculation method, it is recommended to consult the relevant insurance company or professional insurance person.