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Simple English definitions for legal terms
cash value
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A quick definition of cash value:
Cash value refers to the amount of money something is worth. It can be the price of goods or services in an exchange, or the net income from a property. In insurance, it can be the amount of money you get if you redeem your policy before it matures. Cash value is also known as fair market value or full cash value.A more thorough explanation:
Definition: Cash value refers to the monetary worth or price of something, such as goods, services, or money, that can be exchanged in the market. In insurance, it refers to the amount of money payable when a policy with cash value, such as a whole-life policy, is redeemed before maturity or death.
Example: If you have a whole-life insurance policy, it may have a cash value that you can access if you surrender the policy before it matures or you die. The cash value is the amount of money you would receive if you surrendered the policy.
Explanation: The example illustrates how cash value works in insurance. If you surrender your policy, you will receive the cash value, which is the amount of money you have accumulated in the policy over time. The cash value is calculated based on the premiums you have paid, the interest earned on the policy, and any fees or charges deducted from the policy.